An economic model suggests that for every additional year of education, the future wages increase by 5 percent
If Richard, with 12 years of education, earns $20 per hour, how much will he earn per hour if he decides to undertake four additional years of education?
The model suggests that if Richard earns $20 per hour, an additional year of education will increase his hourly wages to 1.05 × $20. Therefore, four additional years of education will increase his hourly wage to 1.05 × 1.05 × 1.05 × 1.05 × $20 or $24.31 per hour.
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The demand for the Franconian franc in the foreign exchange market equals 11,000 - 25,000e and the supply of francs in the foreign exchange market equals 9,000 + 25,000 e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 0.15 U.S. dollars per franc, then the franc is ________ and Franconia has a balance-of-payments ________.
A. overvalued; deficit of 5,500 francs B. overvalued; surplus of 5,500 francs C. undervalued; surplus of 5,500 dollars D. undervalued; deficit of 5,500 francs
The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is
a. an explicit cost. b. an accounting cost c. an implicit cost. d. forgone accounting profit.
The economic decisions of central planners often are wrong because they have little understanding of
a. local economic conditions b. bureaucracies c. Karl Marx's theories d. democracy
Which of the following explains why Keynesian economics lost influence in the 1970s?
A. A change in the how the Federal Reserve was constructed B. The damaging effects of inflation C. A crash in the stock market D. An increase in the marginal tax rate