Career paths-which career will she pursue

Assignment Help Business Economics

Reference no: EM131242326

Mary has two possible career paths. She can become either a biologist or a concert pianist. Mary lives for 2 periods. In the first period she gets the appropriate education for her career. In the second period, she works in the labor market. If Mary becomes a biologist, she will spend $15,000 on education in the first period and earn $475,000 in the second period. If she becomes a concert pianist, she will spend $38,000 on education in the first period and then she will earn $500,000 in the second period. (a) Suppose Mary can lend and borrow money at a market interest rate of 10 percent between the two periods. Which career will she pursue? Briefly explain your answer. (b) Suppose the market interest rate falls to 2 percent. Would Mary choose a different career path than in (a)? Briefly explain why this is the case.

Reference no: EM131242326

Questions Cloud

Marginal revenue produce-value of marginal product of labor : Suppose a firm in a competitive industry faces an equilibrium product price of $2 per unit of output. Table A provides information on the output produced by various amounts of labor. Briefly explain why the marginal revenue produce of labor (MRP) wil..

If policy change causes pareto improvement : If a policy change causes a Pareto improvement, is the outcome necessarily Pareto efficient? If a situation is Pareto efficient, are Pareto improvements possible? If a change occurs that causes a Pareto efficient outcome, is the change necessarily a ..

Competitive industry faces equilibrium product price : Suppose a firm in a competitive industry faces an equilibrium product price of $2 per unit of output. Table A provides information on the output produced by various amounts of labor. Use this information to complete the remaining columns of Table A, ..

Two types of persons-high-ability and low-ability : Suppose there are two types of persons: high-ability and low-ability. The schooling required to obtain a particular diploma costs a high-ability person $8,000 per year, and it costs a low-ability person $10,001 per year. Firms wish to use this diplom..

Career paths-which career will she pursue : Mary has two possible career paths. She can become either a biologist or a concert pianist. Mary lives for 2 periods. In the first period she gets the appropriate education for her career. In the second period, she works in the labor market. Suppose ..

Concerned about the high prices : As a tourist looking to have a vacation in Europe, you are very interested in Switzerland, but you are concerned about the high prices. What other European countries would you consider?

Explores the quasi-linear utility function : This question explores the quasi-linear utility function. Consider Thomas who has preferences over food, QF, and clothing, QC. His preferences are represented by. Determine whether food and clothing are normal or inferior goods for Thomas. Prove your..

Some other business or economic periodical : Select an article from The Wall Street Journal or some other business or economic periodical that relates to the economic topic(s) covered in Workshop Three. Prepare a one to two page analysis of your article . Be sure to include the topic, the autho..

Overall increase in organizational loyalty : Which of the following is most likely true with regard to people's views of organizations in contemporary America? In the American workplace, there has been an overall increase in organizational loyalty. Most Americans are confident in their employer..

User Account

All Pages