(a) Which education gives the highest expected life-time income? (b) Which education will you choose if you strive to maximize your ex- pected utility? Explain. (c) What level of life-time income that you get from education B, would make you indifferent between A and B? What is the minimum wage- premium that you demand in order to choose education A in front of B? (d) Assume that there are many students in your situation, i.e., they want to start education A, but worry that they may fail. Assume
(a) Which education gives the highest expected life-time income? (b) Which education will you choose if you strive to maximize your ex- pected utility? Explain. (c) What level of life-time income that you get from education B, would make you indifferent between A and B? What is the minimum wage- premium that you demand in order to choose education A in front of B? (d) Assume that there are many students in your situation, i.e., they want to start education A, but worry that they may fail. Assume
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: Earnings And Discrimination
Section: Chapter Questions
Problem 5PA
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