Suppose Mike's wage-schooling locus is given by:
|
Years of Schooling
|
Earnings
|
|
9
|
$18,500
|
|
10
|
$21,000
|
|
11
|
$23,000
|
|
12
|
$24,800
|
|
13
|
$26,200
|
|
14
|
$27,000
|
Derive the marginal rate of return for each year of schooling. How many years of schooling will Mike attend if his discount rate is 4 percent? What if his discount rate is 12 percent?