Principles Of Microeconomics, Student Value Edition Plus New Myeconlab With Pearson Etext -- Access Card Package (11th Edition)
Principles Of Microeconomics, Student Value Edition Plus New Myeconlab With Pearson Etext -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780133456301
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 18, Problem 11P
To determine

Identify the role of intergenerational income mobility in an economy.

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The economic model of Human Capital Investment assumes that individuals choose their path through post-secondary education based solely on which path will provide them with the highest lifetime income. In reality, individuals often choose a path through post-secondary education that does not maximize their lifetime income, as a result of various factors. Consider Alex, an individual whose path through post-secondary education did not maximize their lifetime income. For each of the following potential reasons, construct a brief story that relates that reason to Alex's choice of post-secondary education. a) Utility/disutility from education b) Relationship between job satisfaction and education c) Uncertainty of different income streams d) Difficulty of financing human capital investments E.g. If the reason is "incomplete information", a potential answer would be: "Alex's high school guidance counsellor gave them a list of potential university programs that suited their strengths.…
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