3. Suppose that two workers provide efforts (e, and ez) into a production process that yields total revenue of TR(e1,e2) = 32(e. +ez). Worker l's effort costs her TC (ei) = e and worker 2's effort costs him TC (ez) = e. The two workers' individual incomes come from splitting total revenue 50:50 between one another. Their individual utilities are income net of effort costs, so worker l's utility is ui(C1,C2) = 16(e1 + ez) e and worker 2's utility is uz (C1,) = 16(e. + ez) - ez. a. Suppose that each of the two workers described above choose how much effort to supply to maximize their individual utility. (i) What level of effort will each worker choose? (ii) How much income will each worker earn? (iii) How much profit do the two workers create in total? b. Suppose now instead that the two workers work under an organization that gives them incentives to supply effort in a profit-maximizing way (say, due to costly penalties for shirking and generous compensation for supplying effort). (i) What level of effort will each worker choose to maximize profits? (ii) How much income will each worker earn? (iii) How much profit do the two workers create in total? c. Suppose that the two workers can hire a monitor to give them incentives to supply effort in a profit-maximizing way. (i) Would they be willing to do this? If yes, explain why. If not, explain why not. (ii) What is the most the two workers would be willing to pay a monitor to give them incentives to supply efforts in a profit-maximizing way? 3. Suppose that two workers provide efforts (e, and ez) into a production process that yields total revenue of TR(e1,e2) = 32(e. +ez). Worker l's effort costs her TC (ei) = e and worker 2's effort costs him TC (ez) = e. The two workers' individual incomes come from splitting total revenue 50:50 between one another. Their individual utilities are income net of effort costs, so worker l's utility is ui(C1,C2) = 16(e1 + ez) e and worker 2's utility is uz (C1,) = 16(e. + ez) - ez. a. Suppose that each of the two workers described above choose how much effort to supply to maximize their individual utility. (i) What level of effort will each worker choose? (ii) How much income will each worker earn? (iii) How much profit do the two workers create in total? b. Suppose now instead that the two workers work under an organization that gives them incentives to supply effort in a profit-maximizing way (say, due to costly penalties for shirking and generous compensation for supplying effort). (i) What level of effort will each worker choose to maximize profits? (ii) How much income will each worker earn? (iii) How much profit do the two workers create in total? c. Suppose that the two workers can hire a monitor to give them incentives to supply effort in a profit-maximizing way. (i) Would they be willing to do this? If yes, explain why. If not, explain why not. (ii) What is the most the two workers would be willing to pay a monitor to give them incentives to supply efforts in a profit-maximizing way