Calculate the monthly income per capita in each country

Reference no: EM133706599

Question 1. In Avataria the main source of income is hunting. Avatarians have an option to improve their hunting skills by training with the best hunters. The following table describes the returns from training:

Return per year of training
First 3 years of training 15%
Next 2 years of training 12%
Next 2 years of training 10%
Next 3 years of training 5%

(a) Assume there are 200 people in Avataria, and each Avatarian with no training can catch 1 turkey per month. One half of Avatarians has 4 years of training, while the other half has 9 years of training. What is the total number of turkeys caught by all Avatarians per month? What share of these turkeys is caught as a result of "raw skills" and what share is caught because of human ("hunting") capital gained through training? (Remark. The number of turkeys doesn't have to be whole).

(b) In Twilightia all the income and training opportunities are the same. Yet, there are 300 people in Twilightia, and one third of Twilightians has 1 years of training, while the other two thirds have 5 years of training. What is the total number of turkeys caught by all Twilightians per month? What share of these turkeys is caught as a result of "raw skills" and what share is caught because of human capital gained through training? (Again, the number of turkeys doesn't have to be whole.)

(c) Calculate the monthly income per capita in each country. (Hint. Calculate the income per capita as the number of all turkeys caught divided by the number of people in the country.) Compare these monthly incomes per capita and explain the difference.

Reference no: EM133706599

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