-Lucy Works as a College Instructor for a Fixed Annual

question 23

Multiple Choice

-Lucy works as a college instructor for a fixed annual salary of $30,000. She is considering quitting this job and becoming a real estate broker. Lucy believes that as a realtor she has a 40 percent chance to make $60,000 per year and a 60 percent chance to make $25,000 a year. The figure above shows Lucy's total utility of wealth curve (U) . Of the following, what minimum salary raise (if any) should Lucy's current employer offer her to persuade her to stay?

• A) No raise is necessary as Lucy is better off with her current salary than with her expected income as a realtor.
• B) $8,000
• C) $5,000
• D) $3,000

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Definitions:

Criminal

Relating to crimes or the legal system that deals with crimes and their punishments.

In Rem Jurisdiction

A legal term referring to the court's power to adjudicate matters pertaining to property within its territorial jurisdiction, regardless of the owner's location.

"Jurisdiction Over the Thing"

The court's authority to decide on issues related to property or subject matter within its geographical area.

Infinitely Inelastic

Describes a situation where the quantity demanded or supplied does not change regardless of price changes.