1 The utility function is U(x, y)=ax- x* +y and R(e,5)= Be+5. Assume that E(5)=0 and 2 %3D y = OR+ F.Variable x is the manager's leisure consumption, e is effort, y is income, R is firms' profit before deducting managers' pay, and is a random variable. The total time endowment is T. The effort supply function will be (a) Oße+ F (b) өр - а +Т (c) OB+a- F (d) өр+T

1 The utility function is U(x, y)=ax- x* +y and R(e,5)= Be+5. Assume that E(5)=0 and 2 %3D y = OR+ F.Variable x is the manager's leisure consumption, e is effort, y is income, R is firms' profit before deducting managers' pay, and is a random variable. The total time endowment is T. The effort supply function will be (a) Oße+ F (b) өр - а +Т (c) OB+a- F (d) өр+T

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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