Consider a workplace that has two workers who can work as a team. Each worker can put in effort worker 1's effort is labelled et and worker 7's an e2. These effort c simultaneously. Output of the team is Bel+ 4e2. Each worker bears the cost of their effort and has a unity of Us e, where i 1.2 and v assume that the effort of each worker is unobservable but team output can be contracted on. In fact, assume that the balanced-budget rule holde output as their wage. What are the efforts that each workers put in? O e1"-3,2-3 O None of the other answers are correct. O e1-2. e2"-1 O e1-1,e2"-1 O e1"-4, e2"-2
Consider a workplace that has two workers who can work as a team. Each worker can put in effort worker 1's effort is labelled et and worker 7's an e2. These effort c simultaneously. Output of the team is Bel+ 4e2. Each worker bears the cost of their effort and has a unity of Us e, where i 1.2 and v assume that the effort of each worker is unobservable but team output can be contracted on. In fact, assume that the balanced-budget rule holde output as their wage. What are the efforts that each workers put in? O e1"-3,2-3 O None of the other answers are correct. O e1-2. e2"-1 O e1-1,e2"-1 O e1"-4, e2"-2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:Question 12
Consider a workplace that has two workers who can work as a team. Each worker can put in effort worker 1's effort is labelled el and worker 7's as e2. These effort chores are made
simultaneously. Output of the team is Bel+ 4e2. Each worker bears the cost of their effort and has a utility of Ui-wi-ei, where i-1.2 and wi is the wage that the worker ves Now
assume that the effort of each worker is unobservable but team output can be contracted on. In fact, assume that the balanced-budget nule holds in that each worker receives half of team
output as their wage. What are the efforts that each workers put in?
Oel-3, e2-3)
O None of the other answers are correct.
O el 2, e2-1
O el-1,e2-1
O e1-4, 2-2
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