A salesperson works for a car dealership for 40 hours per week, but may not choose to work hard all of the time. The dealership's owner cannot observe the salesperson's effort, but can observe the number of cars sold. The salesperson's personal cost of working at the dealership is C=1000+H^2(square), where H is the number of hours during which he works hard. Without any effort, the salesperson will, on average, generate a profit of $800. With each hour of high effort, he has a 4 percent chance of selling a car. Each car sale generates a profit of $2,000. What is the efficient number of hours of high effort? How much surplus does the relationship generate? Suppose the owner gives the salesperson $1,200 in base pay plus a bonus of $500 for each car he sells. How hard will the salesperson work? Describe an incentive scheme that leads to the efficient effort level and allows the owner to keep all of the surplus