Question 16 Suppose a firm hires a new worker, Jens H. Because the firm knows Jens H. can work hard or shirk, and because monitoring Jens H's effort is costly, the firm wants to give him the right incentive to work hard. If the minimum monthly wage the firm can pay Jens H. for him to work hard is $2,000, how much does Jens H. value his effort if the probability that he leaves for another job is 63D0.09 and the probability that he gets caught shirking and thus fired is q=0.03? O $666.67 O $240 O $500 O $120

Question 16 Suppose a firm hires a new worker, Jens H. Because the firm knows Jens H. can work hard or shirk, and because monitoring Jens H's effort is costly, the firm wants to give him the right incentive to work hard. If the minimum monthly wage the firm can pay Jens H. for him to work hard is $2,000, how much does Jens H. value his effort if the probability that he leaves for another job is 63D0.09 and the probability that he gets caught shirking and thus fired is q=0.03? O $666.67 O $240 O $500 O $120

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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