Proprietor Rojas, a rational utility maximizer, owns a thriving business that requires her and some of her employees to stay in New York for days at a time. Last year Ms. Rojas stayed in New York City for 46 nights, for a total hotel cost of $16,100. Other employees stayed for a total of 16 nights, for a total of $3,200. Rojas sometimes has difficulty getting into the hotel of her choice; all things considered she would prefer to stay in a comfortable apartment on Fifth Avenue.

As you move to this scenario, consider Roxas options and the decisions she must make about corporate housing. The idea is to put yourself on her shoes and based your choices on how you would navigate this issue, both as an owner, then later as a CEO without majority interest in the company and also how issues of ownership employment status and incentives play in deciding how money is spent in one person.

Based on the scenario,

1. how do you think the shareholders reacted to Rojas' decision about staying in the hotel versus staying in the apartment?

2. What factors do you think influenced their reaction and why?