Thank you in advance

2. [70 pts] Imagine the following universal returns to education. 0 1.3 for the rst 5 years of schooling. 0 1.2 for the following 6 years (from year 6 to year 11) 0 1.1 beyond 11 years of schooling (from year 12 and beyond). a. [10 pts] Can you provide an intuitive reason behind the drops in the retums to , education? [10 pts] Would these data means that highly educated people earn less? c. [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 d [10 pts] With a production mction given by y = AkEhE, calculate how much physical capitaIi country A would need to compensate for the difference in human . capital assuming both countries have the same productivity. e. [10 pts] With the same production function, calculate how much preductive country A would need to be to compensate for the difference in human capital assuming both countries haVe the same physical capital per worker. ' ' f. [10 pts] Repeat d. and e. with the following production function: y =1Akhi What did you learn from this exercise? ' F"