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3. Miss Piggy, trying to prove that she is not just a pretty face, urged all of the Muppets to apply to law school at
3. Miss Piggy, trying to prove that she is not just a pretty face, urged all of the Muppets to apply to law school at Sock Puppet University. In preparation for their law school applications, each Muppet took the LSAT and received scores uniformly distributed from Animal's score of 10 to Kermit the Frog's score of 180. The total cost (in present value) of attending Sock Puppet University Law School is $136,000. The Muppets' earnings are directly related to their performance on the LSAT, regardless of whether they go to law school. Those who do not go to law school will earn a present value of YNL = 100 LSAT, while those who do attend law school earn YL 1,000+ 1,000 LSAT. a. Above what LSAT level will attending law school increase the Muppets' net earnings? b. What is the average earnings of the Muppets who do not attend law school? c. What is the average earnings of the Muppets who do attend law school? d. If we compare the average earnings of the Muppets with and without a law degree, is it correct to interpret this as the causal effect of law school on earnings? Why or why not? e. What earnings would the person with the average LSAT score have with education and without education
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