Question 5 (1 point) c(e) c(e ) c(en) 40 Effort The graph above shows a 'cost of effort' function for an employee's effort level represented by'e'. How can the employee's willingness to exert effort be correctly interpreted? a) The employee is not willing to exert any effort until compensated at point (c(e_0), e_0) Obj The employee is willing to increase effort from e_0 to e_1 if their compensation increases by c(e_0) - c(e_1) O c) The employee is willing to increase effort from e_0 to e_1 if their compensation increases by c(e_1) - c(e_0) + 40 O d) The employee is willing to increase effort from e_0 to e_1 if their compensation increases by c(e_1) - c(e_0) Question 6 (1 point) If one party is risk averse and another is risk neutral, the efficient allocation of risk is to place all risk on the risk-neutral party. a) True ( b) False