Question

An employer hires two equally able workers (1 and 2) to collect entrance fees at two different parks. Each worker may choose whether to work either 10 hours or 20 hours per week, 1.e., x, e {10,20) . The employer assigns the two workers arbitrarily to the two parks. Worker l's park is more popular, so it gets 6 visitors per hour, whereas worker 2's park gets only 3 visitons per hour. The total weekly visitors serviced by each worker, therefore, can be represented q, = 6x, and q2-35-Finally, the workers are paid out of net earnings from the entrance fees, which equals $10 per visitor for worker 1's park and $5 per visitor for worker 2's (less popular) park. The total net earnings from which the employer can pay the workers, therefore, equals y, + Уг , where y,-10q, and y2-59-Thus, the workers' only choice is whether to work 10 or 20 hours, whereby we assume the effort per hour is the same for both jobs