How would you test the implications of this model

Reference no: EM131135916

Modify the Ben-Porath model studied in Section 10.3 as follows. Assume that the horizon is finite, and suppose that φ' (0)

where recall that δh is the rate of depreciation of human capital.

(a) Provide the necessary conditions for an interior solution. Highlight how these necessary conditions should be modified to allow for corner solutions where s(t) might take the value of 0 or 1.

(d) How would you test the implications of this model?

Reference no: EM131135916

Questions Cloud

Was reiss successful : Was Reiss successful?- How much capital does Reiss risk to pursue the opportunity?- Why does Reiss risk so little capital?

Summarize the current organizational training program : Explain why you believe the organization's current training model is effective or ineffective Present an idea for a new training program or component to the existing training program which would promote employee engagement.

The oasdi program pays disability benefits : The OASDI program pays disability benefits to a disabled worker and eligible family members. Explain whether each of the following persons would be eligible for disability-income benefits.

How does illegal immigration influence the u.s. economy : How to Hone Your Thesis: It is important that you start your research early in this course. Try to find the most important contemporary questions and theories in your field of study and then align the most important questions with a very specific ..

How would you test the implications of this model : Provide the necessary conditions for an interior solution. Highlight how these necessary conditions should be modified to allow for corner solutions where s(t) might take the value of 0 or 1.

How would the depreciation change if you include the section : How would the depreciation change if you include the Section 179 deductions? Use the limits for the 2006 tax year for all three tax years.

In the emergency department of medical center : In the emergency department of a medical center, the requirement for staff MDs’ time is estimated to be 20,000 minutes per day. The utilization target for MDs is 95%. The medical center’s benefit plan for staff MDs includes 10 holidays, 10 sick days,..

Using decision trees and conditional probabilities : Real options include using decision trees and conditional probabilities. Discuss how real option thinking can promote building costly yet inefficient plants that become profitable.

What is the probability of drawing a pink ball : An 8-sided die is rolled and depending on the result a ball is then chosen from one of three boxes. If the roll results in a 1, 2, or 3 a ball is drawn from box A, if the roll results in a 4 a ball is drawn from box B, and if the roll results in an 5..

User Account

All Pages