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
discuss the revealed preference theory of consumer behaviour
what is Scitovsky Contour ?
1. The figure below is historical production data from the Kuparuk River field. The OOIP is 5,332,979 Mstb and cumulative recovery through 12/31/2004 is 1,971,200,654 stb.
Under capitalism, most production is undertaken by private companies (of various forms), with the goal of generating a profit to the company's owners. Profit is obtained when compa
Q. What do you meant by Hoarding? A situation in that companies, financial investorsor individual consumers choose to hold hoards of cash or other liquid assets, instead of spe
In equilibrium, what are the letters and the total dollar amounts that correspond to the area for the... i. Original Consumer Surplus? ii. Original Producer Surplus? iii.
What is hyper inflation? How it can be reduced? Hyper inflation means that prices of the consumable goods are very high. Prices can be decreased by supplying more goods in th
3
Q. Natural environment for economics? Environment: The natural environment is an essential aspect of the economy, whose influence is felt in several different ways. Everyone
What is the difference between a change in demand and a change the quantity demanded? There is a distinction among demand and quantity demanded. Demand explains the behavior o
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