1. Suppose Maeby Bluth's wage-schooling locus is given by: Years of Schooling Earnings $18,500 $21,000 $23,000 $24,800 $26,200 $27,000 Derive the marginal rate of return for each year of schooling. 10 11 12 13 14 b. How many years of schooling will Maeby attend if her discount rate is 4 percent? c. What if her discount rate is 12 percent?

1. Suppose Maeby Bluth's wage-schooling locus is given by: Years of Schooling Earnings $18,500 $21,000 $23,000 $24,800 $26,200 $27,000 Derive the marginal rate of return for each year of schooling. 10 11 12 13 14 b. How many years of schooling will Maeby attend if her discount rate is 4 percent? c. What if her discount rate is 12 percent?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section: Chapter Questions

Problem 5PA

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Suppose Carl’s wage-schooling locus is given byYears of Schooling Earnings 9 $18,500 10 $20,350 11 $22,000 12 $23,100 13 $23,900 14 $24,000Derive the marginal rate of return schedule. When will Carl quit school if his discount rate is 4 percent? What if the discount rate is 12 percent?
Suppose Fred's wage-schooling relationship is given by Years of Schooling Earnings 9 $28,000 10 $31,150 11 $33,700 12 $35,900 13 $37,400 14 $38,500 Derive the marginal rate of return schedule. When will Fred quit school if his discount rate is 5 percent? What if the discount rate is 10 percent?
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