Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. (10 points). In Avataria the main source of income is hunting. Avatarians have an option to improve their hunting skills by training with the

image text in transcribed
image text in transcribed
1. (10 points). In Avataria the main source of income is hunting. Avatarians have an option to improve their hunting skills by training with the best hunters. The following table describes the returns from training: Return per year of training First 3 years of training 15% Next 2 years of training 12% Next 2 years of training 10% Next 3 years of training 5% (a) (4 points) Assume there are 200 people in Avataria, and each Avatarian with no training can catch 1 turkey per month. One half of Avatarians has 4 years of training, while the other half has 9 years of training. What is the total number of turkeys caught by all Avatarians per month? What share of these turkeys is caught as a result of \"raw skills\" and what share is caught because of human (\"hunting\") capital gained through training? (Remark. The number of turkeys doesn't have to be whole). (b) (4 points) In Twilightia all the income and training opportunities are the same. Yet, there are 300 people in Twilightia, and one third of Twilightians has 1 years of training, while the other two thirds have 5 years of training. What is the total number of turkeys caught by all Twilightians per month? What share of these turkeys is caught as a result of \"'raw skills\" and what share is caught because of human capital gained through training? (Again, the number of turkeys doesn't have to be whole.) (c) (22 points) Calculate the monthly income per capita in each country. (Hint. Calculate the income per capita as the number of all turkeys caught divided by the number of people in the country.) Compare these monthly incomes per capita and explain the difference

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Econometrics By Example

Authors: Damodar Gujarati

2nd Edition

1137375019, 9781137375018

More Books

Students also viewed these Economics questions

Question

What are your sources of information?

Answered: 1 week ago