Please I need all parts!
Instruction: Show your ALL calculations in order to get full credit. 1. Debbie is about to choose a career path. She has narrowed her options to two alternatives. a She can become either a marine biologist or a concert pianist. Debbie lives two periods. In the first, she gets an education. In the second, she works in the labor market. If Debbie becomes a marine biologist, she will spend $15,000 on education in the first period and earn $472,000 in the second period. If she becomes a concert pianist, she will spend $40,000 on education in the first period and then earn $500,000 in the second period. (a) (8 points) Suppose Debbie can lend and borrow money at a 5 percent rate of interest between the two periods. Which career will she pursue? (b) (10 points) What if she can lend and borrow money at a 15 percent rate of interest? Will she choose a different option? Why? (c) (7 points) Suppose musical conservatories raise their tuition so that it now costs Debbie $60,000 to become a concert pianist. What career will Debbie pursue if the interest rate is 5 percent? 2. Suppose Blanca's wage-schooling locus is given by Years of schooling Earnings Marginal Rate of Return to Schooling (%) 9 $18, 500 $20,350 $22, 000 12 $23,100 $23,900 $24,000 10 11 13 14 (a) (10 points) Derive the marginal rate of return schedule for Blanca by completing the table above. (b) (2.5 points) When will Blanca quit school if her discount rate is 4 percent? i. (2.5 points) What if the discount rate is 9 percent? (c) (10 points) How does the presence of ability bias affect the calculation of marginal rate of return to schooling for Blanca?[Be specific but thorough in your explanation] Instruction: Show your ALL calculations in order to get full credit. 1. Debbie is about to choose a career path. She has narrowed her options to two alternatives. a She can become either a marine biologist or a concert pianist. Debbie lives two periods. In the first, she gets an education. In the second, she works in the labor market. If Debbie becomes a marine biologist, she will spend $15,000 on education in the first period and earn $472,000 in the second period. If she becomes a concert pianist, she will spend $40,000 on education in the first period and then earn $500,000 in the second period. (a) (8 points) Suppose Debbie can lend and borrow money at a 5 percent rate of interest between the two periods. Which career will she pursue? (b) (10 points) What if she can lend and borrow money at a 15 percent rate of interest? Will she choose a different option? Why? (c) (7 points) Suppose musical conservatories raise their tuition so that it now costs Debbie $60,000 to become a concert pianist. What career will Debbie pursue if the interest rate is 5 percent? 2. Suppose Blanca's wage-schooling locus is given by Years of schooling Earnings Marginal Rate of Return to Schooling (%) 9 $18, 500 $20,350 $22, 000 12 $23,100 $23,900 $24,000 10 11 13 14 (a) (10 points) Derive the marginal rate of return schedule for Blanca by completing the table above. (b) (2.5 points) When will Blanca quit school if her discount rate is 4 percent? i. (2.5 points) What if the discount rate is 9 percent? (c) (10 points) How does the presence of ability bias affect the calculation of marginal rate of return to schooling for Blanca?[Be specific but thorough in your explanation]
