Suppose that Wilma's utility function is given by U(E) = 100 - 2E2,
Where E = Wilma's work effort in producing homemade dinners,measured in hours per day.Given her utility function,Wilma has an incentive to supply:
A) maximum effort, because working hard is important to her.
B) maximum effort, because she is afraid of getting fired.
C) minimum effort, because she knows she will get fired under any circumstances.
D) minimum effort, because her utility decreases as effort increases.
E) maximum effort, because she can increase her salary by working harder.
Correct Answer:
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