Please show me the derivation (if applicable) and highlight the answer.

Q7 Ch 8 (10%) Would you be more willing to lend to a friend if she had put all of her life savings into her business than you would be if she had not done so? Why? Q8 Ch 8 (15%) You wish to hire Ron to manage your Dallas operations. The profits from the operations depend partially on how hard Ron works, as follows: = Lazy Hard worker Profit Probabilities Profit $10,000 Profit $50,000 60% 40% 20% 80% If Ron is lazy, he will surf the Internet all day, and he views this as a zero cost opportunity However. Ron views working hard as a "personal cost" valued at $1.000. What fixed percentage of the profits should you offer Ron? Assume Ron cares only about his expected payment less any personal cost