4. QUESTION 9Consider the following 2 period model, defining outcomes for people who choose to go or not go to school. Call the periods P1 (school or work) and P2 (work)- If they attend school, earn no income in P1, and earn WH in P2.- If they do NOT attend school, earn income WL in both periods.- At first, there are no costs to schooling, no intrinsic benefits, and people do not discount future earnings.Suppose WH < WL, will the individual choose school? vesIf WH = 10 and WL = 7, will they choose school or not? notKeep WH = 10 and WL = 7 and add an intrinsic value (1) of education to the model. If I = 6, will they choose school or not?Now let WH and WL be unknown parameters again, and suppose that there are direct costs C, intrinsic value of schooling I, and individuals discount their futureearnings at a rate of D such that 0

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Consider the following 2 period model, defining outcomes for people who choose to go or not go to school. Call the periods P1 (school or work) and P2 (work) - If they attend school, earn no income in P1, and earn WH in P2. - If they do NOT attend school, earn income WL in both periods. - At first, there are no costs to schooling, no intrinsic benefits, and people do not discount future earnings.

Consider the following 2 period model, defining outcomes for people who choose to go or not go to school. Call the periods P1 (school or work) and P2 (work) - If they attend school, earn no income in P1, and earn WH in P2. - If they do NOT attend school, earn income WL in both periods. - At first, there are no costs to schooling, no intrinsic benefits, and people do not discount future earnings.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 1PA

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