Question

Schooling Info: MJ has 2 years of college, Fabio has 3 years, and Mijung has 4 years.

Wage Info: MJ earns $21, Fabio earns $23, and Mijung earns $25. Assume the differences in education attainment are due completely to different discount rates.
First, Rank the three people from highest to lowest discount rate (fill in the blank).
Second, use the wage and years of schooling information above to calculate the returns to additional years of schooling and then give a numerical range for each persons’ discount rate (fill in the blanks below).

Ranking
Highest Discount Rate: ____________ Middle Discount Rate: ____________ Lowest Discount Rate: ____________

Numerical Ranges: circle either [less/greater], and then fill in the blank with the correct percentage: MJ’s discount rate must be [less/greater] than _________%
Fabio’s discount rate must be between _________% and _________%
Mijung’s discount rate must be [less/greater] than _________%

Answer 1

3 years 4 years Ranning: Im J) I Fabio I migung as mi is the most impurient and he only did 2 years of college study, so as the kancing. 1 0 mJ Pabio Migung college: 2 Jeans wale 31$ 338 258 if my smay a years he will get a & extra rage my's discount natre per year - Smy 24 Fabio did a year more shody & get 2 fexma, Fabio's discount nate (&fabio) = 2 And Migung studied all along so he is patient a so his discount rate = o. highest Discount Rate = Hawt middle lowest " " = 0 than soy 1 - mi's discount Rate must be greates of Fabio's 1 1 and Fabia's discount Rate should 100% and sor , migung discount Rate must be less than sol.