Question
Scott is a manager at a pool cleaning business. He has hired 10 workers to clean pools for him and is considering what type of
Scott is a manager at a pool cleaning business. He has hired 10 workers to clean pools for him and is considering what type of payment scheme he should set up for his workers. He can pay each of his workers $10 per hour to clean pools, or he can pay his workers $20 for each pool a worker cleans. (It takes 2 hours, on average, for an employee to clean a pool thoroughly).
a. If Scott wants to maximize the number of pools his workers clean in one day, which payment scheme should he use? Explain.
b. Explain how Scott's problem is a principal-agent problem.
c. Propose one way for Scott to solve the principal-agent problem.
d. Hiring the 10 workers is an implicit or an explicit cost for Scott's business? Explain.
e. If Scott wants to maximize his business's profit, should he pay his workers $10 per hour or $20 per cleaned pool? Explain.
plz answer a to e plz help
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