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

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter8: Market Failure

Section: Chapter Questions

Problem 9P

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