Sam Is Suing Someone in Court for $10,000

question 79

Essay

Sam is suing someone in court for $10,000.The probability that Sam will lose the case is 1/h where h is the number of hours that Sam's attorney works on the case.The lawyer charges $500 per hour if he is to be paid hourly,or he requests 20% of the settlement if he is to be paid on a contingency basis.Assuming both Sam and the attorney are risk-neutral wealth maximizers,is either contract efficient?

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Definitions:

Unemployed

Individuals who are capable of working and actively seeking work but without employment during the period of assessment.

GDP Deflator

is an economic measure of inflation that indicates the level of prices of all new, domestically produced, final goods and services in an economy.

Real GDP

The measure of a country's economic output adjusted for price changes, reflecting the value of goods and services at constant prices.

GDP

Gross Domestic Product is an indicator of a nation's economic health, showing the total value of all products and services made within a specific timeframe.