Leontief Associates has expanded to include n partners. Its new technology is B min(e₁, e₂, , e_n). The income
of each partner is Y/n. The utility functions are u_i= y_i- e_i².
i)Describe the Pareto efficient effort levels, the corresponding income levels, and the utility of a typical partner when everyone behaves efficiently.
ii)Suppose the firm is bought by a new owner. Describe an employment contract the new owner would use to get each employee to contribute the efficient effort level.

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The Answer of Leontief Associates has expanded to include n partners. Its new technology is B min(e₁, e₂, , e_n). The income of each partner is Y/n. The utility functions are u_i= y_i- e_i². i)Describe the Pareto efficient effort levels, the corresponding income levels, and the utility of a typical partner when everyone behaves efficiently. ii)Suppose the firm is bought by a new owner. Describe an employment contract the new owner would use to get each employee to contribute the efficient effort level.

Leontief Associates Has Expanded to Include N Partners