Consider the Salary of Mary Sue Nelson, a Sales Agent

Multiple Choice

Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. Her wage package is W = 1,000 + .4Q, where Q is her dollar volume of sales. Her productivity is Q = 200e + , where e denotes her hours of effort and m is a random variable with mean 0. She has an effort cost of C = e². Under this contract, her choice of effort will be:

A) 0 hours per week.
B) 20 hours per week.
C) 40 hours per week.
D) 80 hours per week.