You wish to hire Ron to manage your Dallas operations. The profits from the operations depend partially on how hard Ron works, as follows. Profit Probabilities Profit = $20,000 Profit = $40,000 Lazy 60% 40% Hard worker 40% 60% 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 $2,000 Assume that Ron cares only about his expected payment less any personal cost. (a) What is your expected profit when Ron is lazy? What is your expected profit when Ron works hard? (4 marks) (b) What fixed percentage of the profits (at least) should you offer Ron if you want Ron to work hard? (6 marks)