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WS. Profit $10,000 T Profit $50,000 = worker 60% 40% worker 20% 80% Internet all day, and he views this as a zero cost opportunity. However, Ricky would mal cost" valued at $1,000. What fixed percentage of the profits should you offer es about his expected payment less any "personal cost." Probabilities

WS. Profit $10,000 T Profit $50,000 = worker 60% 40% worker 20% 80% Internet all day, and he views this as a zero cost opportunity. However, Ricky would mal cost" valued at $1,000. What fixed percentage of the profits should you offer es about his expected payment less any "personal cost." Probabilities

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter2: Fundamental Economic Concepts
Section: Chapter Questions
Problem 4E
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4. You wish to hire Ricky to manage your Dallas operations. The profits from the operations depend partially on how hard Ricky works, as follows. Probabilities Profit $10,000 Profit= $50,000 Lazy worker 40% 60% 20% Hard worker 80% If Ricky is lazy, he will surf the Internet all day, and he views this as a zero cost opportunity. However, Ricky would view working hard as a "personal cost" valued at $1,000. What fixed percentage of the profits should you offer Ricky? Assume Ricky only cares about his expected payment less any "personal cost."
Transcribed Image Text:4. You wish to hire Ricky to manage your Dallas operations. The profits from the operations depend partially on how hard Ricky works, as follows. Probabilities Profit $10,000 Profit= $50,000 Lazy worker 40% 60% 20% Hard worker 80% If Ricky is lazy, he will surf the Internet all day, and he views this as a zero cost opportunity. However, Ricky would view working hard as a "personal cost" valued at $1,000. What fixed percentage of the profits should you offer Ricky? Assume Ricky only cares about his expected payment less any "personal cost."
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