. Consider the following modied version of the example we discussed in class. Sup pose you hire a manager to manage your family farm. You are risk neutral and maximize expected prots. The relationship between prots and managerial effort is given by \"shirk\" Probability of yielding 3/3 = 1000 0.2 Probability of yielding yL = 0 0.8 0.2 The cost for the manager to choose \"work\" is 20, and the cost of choosing \"shirk\" is 10. (a) Suppose the manager is risk averse with utility function u(w) = \"5. Upon receiving wage to, the manager's net utility is E 20 if \"work\" and is w 10 if \"shirk\". Suppose you offer a linear contract: to = 400 + 0.53;. Suppose that the manager's outside option generates a (net) reservation utility of 10. Will the manager accept your contract offer and choose \"work\" instead of \"shirk\"? Please carefully justify your answer. (20 points) (b) Suppose the manager is risk neutral with utility function 11.00) = 11). Upon receiving wage to, the manager's net utility is w 20 if \"work\" and is w 10 if \"shirk\". Suppose that the manager's outside option generates a (net) reservation utility of 400. What is the optimal contract for you to offer? (15 points)