A Manager Has a Utility Function U = C ⁰

question 6

Multiple Choice

A manager has a utility function U = C ^0.5 if she doesn't work hard and U = C ^0.5 - 1 if she does.Expected profit will increase from 1,500 to 1,600 if she works hard.The manager receives compensation C equal to 81 plus a portion x of any profit in excess of 1,500.What is the value of x that will make the manager indifferent between shirking and working hard?

• A) 0.09.
• B) 0.105.
• C) 0.19.
• D) 0.242.
• E) None of the above.

---

Definitions:

Granulosa Cells

Cells found in the ovarian follicles that surround developing egg cells, playing crucial roles in egg maturation and hormone production.

Corpus Luteum

A temporary endocrine structure in female ovaries that is involved in the production of progesterone during the menstrual cycle.

Ovulation

The process in the female reproductive cycle where an egg is released from an ovary.

Progesterone

A steroid hormone released by the corpus luteum that stimulates the uterus to prepare for pregnancy.