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2 Moral Hazard and Adverse Selection(50') We change the setting of question 1 slightly to discuss the effect of moral hazard. I still affects the probability of getting sick. The probability of getting sick is 0.05 -0.030 and the expenditure is 200 if being sick. Moreover, health condition x depends on effort. The relation between effort and r is x = to exple-0.5). To is a random variable that follows uniform distribution U[0, 1], and e is the effort level that can take three values: 0.0.3, and 0,5. The private cost of effort is cle) = 10e?. 2. Can you provide the range of so that will optimally pay effort 0, 0.3, and 0.5 respectively when they correctly calculate their probability of being sick? (10) 2 Moral Hazard and Adverse Selection(50') We change the setting of question 1 slightly to discuss the effect of moral hazard. I still affects the probability of getting sick. The probability of getting sick is 0.05 -0.030 and the expenditure is 200 if being sick. Moreover, health condition x depends on effort. The relation between effort and r is x = to exple-0.5). To is a random variable that follows uniform distribution U[0, 1], and e is the effort level that can take three values: 0.0.3, and 0,5. The private cost of effort is cle) = 10e?. 2. Can you provide the range of so that will optimally pay effort 0, 0.3, and 0.5 respectively when they correctly calculate their probability of being sick