Assume that you are 18 years old and deciding whether to go to university or start working. If you work, you will earn a constant wage WHS throughout your career. If you study, you pay tuition for four years and then earn a constant wage WUNI. a. Show the condition under which you will choose to study. b. Explain how changes in tuition, interest rate, and wage differential (WUNI – WHS) would affect your decision
Assume that you are 18 years old and deciding whether to go to university or start working. If you work, you will earn a constant wage WHS throughout your career. If you study, you pay tuition for four years and then earn a constant wage WUNI. a. Show the condition under which you will choose to study. b. Explain how changes in tuition, interest rate, and wage differential (WUNI – WHS) would affect your decision
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that you are 18 years old and deciding whether to go to university or start working. If you work, you will earn a constant wage WHS throughout your career. If you study, you pay tuition for four years and then earn a constant wage WUNI.
a. Show the condition under which you will choose to study.
b. Explain how changes in tuition, interest rate, and wage differential (WUNI – WHS) would
affect your decision
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