Consider a two-period human capital investment framework. Suppose that the link between the amount of investment into schooling (we denote this amount by s) and earnings, w, is governed by w (s) = 9 · si . If the interest rate is 10% (r = 0.10), what is the optimal level of s? Calculate and enter it in the box below. Round your answer to two decimal spaces. Note: the first derivative of a function f (x) = a · x³ is f' (x) = ab · x³-1 . Consider a two-period human capital investment framework. Suppose a worker's earnings are governed by w(s) = 8-In(1 + s) andr = 0.5. Given the unemployment rate with 7 of 16 workers unemployed, what is the optimal level of schooling investment? Calculate and enter it in the box below. Round your answer to two decimal spaces. Note: the first derivative of a function f (x) = a · In(1 +æ) is ƒ' (æ) = a a :
Consider a two-period human capital investment framework. Suppose that the link between the amount of investment into schooling (we denote this amount by s) and earnings, w, is governed by w (s) = 9 · si . If the interest rate is 10% (r = 0.10), what is the optimal level of s? Calculate and enter it in the box below. Round your answer to two decimal spaces. Note: the first derivative of a function f (x) = a · x³ is f' (x) = ab · x³-1 . Consider a two-period human capital investment framework. Suppose a worker's earnings are governed by w(s) = 8-In(1 + s) andr = 0.5. Given the unemployment rate with 7 of 16 workers unemployed, what is the optimal level of schooling investment? Calculate and enter it in the box below. Round your answer to two decimal spaces. Note: the first derivative of a function f (x) = a · In(1 +æ) is ƒ' (æ) = a a :
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1

Transcribed Image Text:Consider a two-period human capital investment framework.
Suppose that the link between the amount of investment into schooling (we denote this amount by
s) and earnings, w, is governed by w (s) = 9 · si .
If the interest rate is 10% (r = 0.10), what is the optimal level of s? Calculate and enter it in the box
below. Round your answer to two decimal spaces.
Note: the first derivative of a function f (x) = a · x³ is f' (x) = ab · x³-1 .
Consider a two-period human capital investment framework.
Suppose a worker's earnings are governed by w(s) = 8-In(1 + s) andr = 0.5. Given the unemployment
rate with 7 of 16 workers unemployed, what is the optimal level of schooling investment? Calculate
and enter it in the box below. Round your answer to two decimal spaces.
Note: the first derivative of a function f (x) = a · In(1 +æ) is ƒ' (æ) = a
a :
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