University students need to study to learn. Studying is not fun because of the effort. Assume students do not study to learn, instead assume they study only to get good grades. Consider a case of two students with identical ability in the sense that if they study the same amount, they will write the same quality of test answers. In all parts of this question assume that only student wellbeing matters in determining Pareto efficiency. It is all from the students perspectives. Consider Professor A who always (no matter what) assigns grades on a curve in the sense that while giving higher grades for better performances, the class average is always 70%, no matter how great or how weak the actual test answers.

a) Is a zero level of studying for both students a Pareto efficient level of studying for these students? Assume it is not possible for students to write any contracts with each other. Would you expect the level of studying actually undertaken to be Pareto efficient? Explain fully.

b) Now assume it is possible for students to write enforceable contracts with each other and that there is complete information about each others abilities and preferences. What contract might they want to write? Explain fully.

c) If you were Professor As boss what else would you worry about in terms of student learning and student experience? Explain fully.