(g) differ? Explain why. Cons sider a managerial effort example similar to the one in Section 5. The value of a successful project is $420,000; the probabilities of success are 1/2 with good supervision and 1/4 without. The manager is risk neu- tral, not risk averse as in the text, so his expected utility equals his ex- pected income minus his disutility of effort. He can get other jobs paying $90,000, and his disutility for exerting the extra effort for good supervi- sion on your project is $100,000. (a) Show that inducing high effort would require the firm to offer a compensation scheme with a negative base salary; that is, if the project fails, the manager pays the firm an amount stipulated in the scheme. (b) How might a negative base salary be implemented in reality? (c) Show that if a negative base salary is not feasible, then the firm does better to settle for the low-pay, low-effort situation.

Health and safety regulations in the labor market Multiple Choice O O are always efficient because they improve working conditions. should be evaluated by comparing their costs to their benefits. can lead to an increase in frictional unemployment. Saved are necessarily inefficient if they impose additional costs on employers.

Explicit cost = $100 Implicit cost = $163 Total cost = ?

Based on the graph below, how much is the marginal product of labour of the sixth worker, if Q5=67 units per period and Q6=88. Q in Units/period Q6 Q5 6. Lin Workers/period Ca15 units per peciod