Ask Question, Ask an Expert


Ask Microeconomics Expert

Professor P has hired a teaching assistant, Mr. A. Professor P wants to maximize her payoff function, x-s, where x is the number of hours taught by Mr. A and s is the total wages she pays him. If Mr. A teaches for x hours and is paid s, his utility is s-c(x) where c(x) =X^2/2. Mr. A's reservation utility is zero, meaning that if he does not take the job, then his payoff will be zero. .

(a) If Professor P chooses x and s to maximize her utility subject to the constraint that Mr. A is willing to work for her, how much teaching will Mr. A be doing?
(b) How much will Professor P have to pay Mr. A? What are their payoffs?
(c) Suppose that Professor P uses a scheme of the following kind . Professor P sets a wage schedule of the form s(x) = ax + b and lets Mr. A choose the number of hours that he wants to work. What values of a and b should Professor P choose so as to maximize her payoff? What are her and Mr. A's payoffs?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M945145

Have any Question? 

Related Questions in Microeconomics

Success and failurethink about the causes of success and

Success and Failure Think about the causes of success and failure for particular movements. What causes some to become widely appealing and have major impacts on change? What causes others (regardless of the validity of ...

Assignment external financinggenesis energys newly

Assignment: External Financing Genesis Energy's newly established operations management team decided to seek outside assistance in developing a long-term operating plan that also addresses the financial issues identified ...

Digital media power point presentationdigital media has

Digital Media Power point presentation Digital media has changed the ways ideas, information, and arguments in society are communicated both locally and globally. Individuals and organizations frequently use digital medi ...

Assignmentmicroeconomicsdirections unless otherwise stated

ASSIGNMENT Microeconomics Directions: Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four dou ...

Economicsselect a new realistic good or service for an

Economics Select a new, realistic good or service for an existing industry, preferably an industry you current work in or one in which you are interested in working. Develop a 1,400-word evaluation of pricing strategies ...

1 firms that had virtual monopolies that is control over at

1. Firms that had virtual monopolies, that is control over at least 80% of industry production, because of control over an essential resource include all of the following except the A) National Football League in the 195 ...

Question 1 suppose you are given the following information

Question 1: Suppose you are given the following information about an industry: Q D = 8000 - 100p; Q S SR = 20 + 700p; c(q) = 20 + q 2 /20. where q and c (q) stand for a firm's quantity supplied and cost function; Q S SR ...

Part awe have discussed several examples of constrained

Part A: We have discussed several examples of constrained utility maximisation in lectures and in classes. For example, we have learned how to find the optimal bundle of goods consumed by an individual trying to maximise ...

Microeconomics - price floorassignmentin a perfectly

Microeconomics - Price Floor Assignment In a perfectly competitive market, the equilibrium price and quantity represent the most efficient operation of that market. Optimum efficiency means that sellers cannot be made be ...

Microeconomicsassignment capitalism and the us economyin a

Microeconomics Assignment: Capitalism and the U.S. Economy In a command or planned economy, the government, not the market, regulates the factors of production and economic activities considered essential to the function ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate