Suppose that capital markets are imperfect and some workers face borrowing constraints (cannot obtain loan to finance their education at the market interest rate). What will be the relationship between marginal benefit and marginal costs of education for these workers? (c) The marginal benefit of an additional year of schooling will be lower than the marginal cost. (d) The marginal benefit of an additional year cannot be compared to the marginal cost.

Suppose that capital markets are imperfect and some workers face borrowing constraints (cannot obtain loan to finance their education at the market interest rate). What will be the relationship between marginal benefit and marginal costs of education for these workers? (c) The marginal benefit of an additional year of schooling will be lower than the marginal cost. (d) The marginal benefit of an additional year cannot be compared to the marginal cost.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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