Parts D,E,F please

2. [70 pts] Imagine the following universal returns to education. a. b. c. d. . physical capital country A would need to compensate for the difference in human 13 for the first 5 years of schooling. 1.2 for the following 6 years (from year 6 to year 11) 1.1 beyond 11 years of schooling (from year 12 and beyond). _[10 pts] Can you provide an intuitive reason behind the drops in the returns to education? [10 pts] Would these data means that highly educated people earn less? [10 pts] Calculate the relative human capital between country A that has 8 years of education on average versus country B with 18 years of education. 1 1 [10 pts] With a production function given by y = Akihi, calculate how much capital assuming both countries have the same productivity. [10 pts] With the same production function, calculate how much productive country A would need to be to compensate forthe difference in human capital assuming both countries have the same physical capital per worker. I 2 [10 pts] Repeat (1. and e. with the following production function: y = Ak3h5. What did you learn from this exercise? [20 pts (bonus)!] Now think in terms of policy. Compare your answers in d, e.,~ and f. Which path do you think is more plausible to follow to close development gaps? (hint: there is no right answer here, you need to think carefully and come up with a sensible path forward for country A. Make sure you respect the theory while pursuing this path. You will be evaluated based on your ability to connect di'erent ' ideas that we have covered in class)