2. A risk neutral worker enuaes in two different tasks, task 1 and task 2. Let 81 and e2 denote the effort he exerts in each, respectively, and assume el + e2 g 1. Effort is privately known only to the worker and also costly to exert. The agent's cost of effort is defined by the following function 1 C(81,2) = is? + 363, where Q5 > 0. The firm's valuation depends on the amount of effort the worker puts into task 1, only. It is repre- sented by the strictly increasing and concave function V091). The rm possesses a monitoring technology that allows it to observe a noisy signal of the worker's total effort. This monitoring technology emits the signal 3 = 1 if it thinks effort is high and s = 0 if it thinks effort is low. The probability 5 = 1 is P[s = 1|el,62] = 61 + 62. In addition to paying the worker the xed wage F 3 0, the Principal has implemented a bonus scheme, whereby the worker is paid B 2 0 if and only if .5 = 1. (a) (15 points) Set the Principal's problem and intuitively explain it. How would you interpret .92? (b) (15 points) What is the optimum F? lntuitively discuss your result. (0) (20 points) What is the Principal's cost of implementing effort at the optimum? Discuss your result