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Answers are 19. C , 20.b , 21.c Starsky and Hutch are employed by the Bay City P

ID: 1155846 • Letter: A

Question


Answers are 19. C , 20.b , 21.c


Starsky and Hutch are employed by the Bay City Police Department. that Starsky always works hard. In their previous job (those are still pen for them) t Everybody knows both earned $10,000 At the Department cheerleaders. if he spends time with the cheerleaders Starsky alone can close the case successfully with probability 70%. Of course, Hutch likes spending time with girls better than working hard, so in order for him to work hard he needs to be compensated an additional $400 in terms of money, not utility Hutch has a risk-averse utility for his income y, or-/y , Hutch can either work hard on the case or spend his time with local If he works hard they can close the case successfully with probability 90%, 19. If Captain Doby wants him to work hard he has to offer Hutch a bonus for the successful case not less than adt does ot att give hm a base salary a. $5000 b. $7000 c. $10000 d. $15000 e. There is no way to make him work hard. 20. What is the base salary that Hutch would ask for if he works hard? a. $120 b. $900 c, $1000 d. $7000 e. $10400 21. The Major decides to reward the department by $50000 after every successful case. Then Captain "rational" Doby, who is risk-neutral for his department's budget, would want Hutch toso offers him a bonus of S salary of S and a a. work hard, 10000, 3000 b. slack, 0, 10000 c. leave the department, 0, 0 d. work hard, 13000, 0 e. slack, 3000, 10000

Explanation / Answer

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