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Economics

Description of Utility function

A manager has a utility function U = C 0.5 if she does not work hard and U = C 0.5 - 1 if she does. Expected profit will increase from 1,400 to 1,600 if she works hard. The manager receives compensation C equal to 82 plus a portion x of any profit in excess of 1,400. 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
Reference No.:- M927826

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