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Agnes, a risk-averse auto windshield installer who is currently paid a fixed wage, is offered a new plan under which her hourly wage is decreased
Agnes, a risk-averse auto windshield installer who is currently paid a fixed wage, is offered a new plan under which her hourly wage is decreased but she is also paid a piece rate for every windshield installed, to the effect that if she worked the same hours as currently and installed the same number of windshields, her total compensation would be the same as before. How would the change affect Agnes's utility?
A) It would increase
B) It would decrease
C) It would not change
D) Depends, her utility could increase or decrease
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