Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Assume that in the market there exist two types of workers where the principle cannot distinguish types. The two types only differ with respect to the disutility of effort. The disutility is either e^2 or 2e^2.
The utility function for worker one is
U^1(w,e) = w - e^2
and for worker two
U^2(w,e) = w - 2e^2
both types of workers have reservation utility zero
The probability that the worker is of type 1 is q = 1/2
An interested firm is risk neutral and has profits Π (w,e) = e - w
a) Which is the good high productive worker and which is the low productive worker
b) Derive the optimal contract for the firm if it had perfect info about the workers type. What effort levels are demanded and what wages paid. Calculate the firm's profits of both types were employed
c) Formulate the problem when an adverse problem is present
d) Derive the second best contract and calculate the firm's profits
e) Compare the cases of symmetric and assymetric info
Explain the approach of characterizing the modern economic environment. Modern economics gives various perspectives or angles to seem at real world economic issues. An economic
What is checkable bank deposits?
Explain why each of the following factors may influence the own price elasticity of demand for a commodity. The narrowness of the definition of the commodity
What is the distinguishes a progressive income tax, from a proportional income tax, or a regressive income tax? A proportional income tax takes the similar percentage of a pe
What are the economies and diseconomics of scale?
What is What is Critical Temperature? Why Critical Temperature is Specified in Equation? Describe critical temperature specification...
A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70. What would you advise this firm to do?
Contribution of bonds in n economy.
What is the concept of the development? The concept of the development: Development is a complicated multi-dimensional concept to do along with enhancements in the human
differance between capitalism and socialism
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd