7. Suppose the cost of effort function for an employee is

() = 0 35 = 0.5( 35) 2 > 35

where is given in hours worked per week. Moreover, each unit of produces an extra $100 in sales. The firm offers a salary-plus-commission job of $600 per week plus 20% of sales.

a) Calculate the effort level at which the employee maximizes his payoff.

b) What is the employee's actual salary when he works to maximize his payoff? Given the market wage is $1200, will the employee accept this offer?