2. Consider the case of two students, 1 and 2, with preferences represented by u

Question

2. Consider the case of two students, 1 and 2, with preferences represented by utility functions U W and U2 - W2, respectively, where W denotes wealth. Shortly after graduation, each of them receives an invitation for an interview concerning two different positions, say job 1 and job 2, available in the same company. The students know they are the only two candidates (so they know they wl not be unemployed, but do not know which job they will be of- fered). Also, having graduated with the same grades, they face exactly the same chances to obtain each job (probability 1/2). The working hours for each job are exactly the same, but the job in the first position is highly paid (£64 per hour), the one in the second is much less paid (£16 per hours) Student 1 proposes 1, I will pay you £24 per each hour we work. Viceversa, (i.e., you are offered job 1) you will transfer to me £24 for each hour of work" the following agreement to student 2: "If I am offered job (a) Show that student 2 will refuse to enter the agreement (b) Show that if student 2 were risk neutral, he wouldn't have minded (i.e he would have been indifferent) to enter the agreement (c) What would student 2's decision be, if he had the same preferences of student 1? (d) Suppose student 1 proposal were the following: "If I am offered job 1, you will pay me £16 per each hour of work. Viceversa, I will transfer to you £16 for each hour of work". Would student 2 accept? Please, always explain your answers

Explanation / Answer

As its not stated in the question that if there is frictional force into the picture of not.

We will just consider the angle.The acceleration varied with the sine of angle.

In the first one [ heta] looks bigger than second one.

actual angle into consideration would be

angle = 180 - ( 90 + [ heta] )

angle 1 is smaller than angle 2, since [ heta] 1> [ heta] 2.

a1 < a2

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