Homework4 - W3211 Spring 2009 Professor Vogel Homework #3:...

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W3211 Spring 2009 Professor Vogel Homework #3: Due Tuesday 03/31/09 Please write your name on the top of every page of your homework (in case they get separated) and please staple all pages together . Where appropriate, you must show all work. If you just give an answer without work, For a given income, I , and a given level of e/ort e ± 0 u ( I;e ) = I ² 1 2 e 2 . R ( e ) = 10 e . 1. (20 Points) Suppose Sue earns a wage w ± 0 no matter how much e/ort she exerts. (a) (10 Points) Solve for the level of e/ort she will exert as a function of the wage. (b) (10 Points) Given your answer to part ( a ) solve for the wage w ± 0 that maxi- R ( e ) ² w in this case. [i.e. Suppose the ±rm knows how much e/ort Sue will exert given its choice of wage. Then solve for the wage the ±rm would choose that maximizes its pro±t] 2. (20 Points) b ± 0 for every unit of e/ort that she exerts. (a)
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This note was uploaded on 12/21/2009 for the course ECON 1211 taught by Professor Govel during the Spring '08 term at Columbia.

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Homework4 - W3211 Spring 2009 Professor Vogel Homework #3:...

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