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Economics

A manager has a utility function U = C ^0.5 if she doesn't work hard and U = C ^0.5 - 3 if she does. Expected profit will increase from 1,000 to 1,500 if she works hard. The manager receives compensation C equal to 144 plus a portion x of any profit in excess of 1,000. What is the value of x that will make the manager indifferent between shirking and working hard?

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Business Economics, Economics

Category:- Business Economics
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