Consult the table below, and answer the following questions: Schooling Salary $18500 9 10 11 12 13 14 $21000 $23000 $24800 $26200 $27000 1. What is the marginal rate of return for the 10th year of schooling in absolute terms? a. $2500 b. $21000 C. -$2500 d. Uncertain without knowing the price of tuition. 2. If this person's discount rate is 4%, how many years should they attend school? (Hint: convert the MRR to percentage terms) 9 years a. b. 10 years c. 11 years d. 12 years e. 13 years f. 14 years
Consult the table below, and answer the following questions: Schooling Salary $18500 9 10 11 12 13 14 $21000 $23000 $24800 $26200 $27000 1. What is the marginal rate of return for the 10th year of schooling in absolute terms? a. $2500 b. $21000 C. -$2500 d. Uncertain without knowing the price of tuition. 2. If this person's discount rate is 4%, how many years should they attend school? (Hint: convert the MRR to percentage terms) 9 years a. b. 10 years c. 11 years d. 12 years e. 13 years f. 14 years
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 14E
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Please help with #2
![Consult the table below, and answer the following questions:
Schooling
Salary
$18500
$21000
$23000
$24800
9
10
11
12
13
14
1. What is the marginal rate of return for the 10th year of schooling in absolute terms?
a. $2500
b. $21000
C. -$2500
d. Uncertain without knowing the price of tuition.
2. If this person's discount rate is 4%, how many years should they attend school?
(Hint: convert the MRR to percentage terms)
a. 9 years
b.
$26200
$27000
10 years
11 years
12 years
e. 13 years
f.
14 years
c.
d.
3. If instead their discount rate were 8%, how many years should they attend school?
a. 9 years
b. 10 years
c. 11 years
d.
12 years
e. 13 years
f. 14 years
4. Short answer: why can't we simply compare earnings of high school graduates to
college graduates to estimate the effect of a college education on earnings?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd47d2725-9ed4-4a07-8ea4-b309d33139a1%2F9e6db46b-ba0f-4b42-849a-fe86c6ae21df%2Ftyxb0mw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consult the table below, and answer the following questions:
Schooling
Salary
$18500
$21000
$23000
$24800
9
10
11
12
13
14
1. What is the marginal rate of return for the 10th year of schooling in absolute terms?
a. $2500
b. $21000
C. -$2500
d. Uncertain without knowing the price of tuition.
2. If this person's discount rate is 4%, how many years should they attend school?
(Hint: convert the MRR to percentage terms)
a. 9 years
b.
$26200
$27000
10 years
11 years
12 years
e. 13 years
f.
14 years
c.
d.
3. If instead their discount rate were 8%, how many years should they attend school?
a. 9 years
b. 10 years
c. 11 years
d.
12 years
e. 13 years
f. 14 years
4. Short answer: why can't we simply compare earnings of high school graduates to
college graduates to estimate the effect of a college education on earnings?
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