Question

Consider the human capital growth model. Let us make the following changes. Depending on whether the current calendar year is an odd or even number, the efficiency parameter of the human capital accumulation technology changes between 5.15 and 2.04. In particular, when the calendar year is an odd number (for example in years 1 and 3) the parameter b is 5.15 and z is 6. However, in even years (for example in years 2 and 4) the parameter is 2.04 and z is 3. Also, let us assume that in each odd year u = 0.8 and in each even year u = 0.5. Let the human capital level at the beginning of period 1 be H1 = 1. Each consumer has one unit of time which can be allocated between work and accumulating human capital.

1. Calculate the human capital level for years 2, 3 and 4.

2. Calculate the consumption level for years 2, 3 and 4.

3. After how many years will the consumption double?

Answer #1

In the case of TFC, after using the constant growth model formula:

P = D1/r-g, where P = current stock price, D1 = Value of the dividend for next year, r = cost of the equity capital, g = constant growth rate

we can calculate the price of the TFC stock by using the above formula. In this case the growth model gives a value of 220 and the current market price is 220.26. So the stock is overvalued by 0.26 (220.26-220) because the current market price of the stock is greater than the intrinsic value.

1.1 Brain-drain in the endogenous growth model As discussed in
class, human capital externalities could explain why we observe the
phenomenon known as ‘brain drain’. That is, skilled individuals
(i.e., fast learners) from less developed countries migrating to
more developed countries to benefit from higher levels of human
capital. An implication of this ‘brain drain’ is that the average
skill of workers in developed countries is higher than it is in
less developed countries. This idea can be easily introduced...

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a) they come from richer families
b) they are more patient
c) they have talent in acting
d) they are more intelligent
2. According to the Human Capital Model, which of the following
changes in circumstances will make people more likely to go to
college:
a) college tuition decreases
b) the economy is in recession
c) there is more...

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?(?,̇ ?̇)= ?/2 (?̇²+ ?̇²)
?(?,?)= ?/2 (?²+?² )+???
where x and y denote, respectively, the cartesian displacements
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the displacements; m the mass of the oscillator; K the stiffness
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1) Using the following coordinate transformations,
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?= 1/√2...

Let us instead fit a linear regression model to the data on
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SHOW ALL WORK!
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1. Which of the following statements are correct?
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Consider the following labour-leisure choice model. U(C,L) =
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C = wN + π – T
H= N+ L Where
C: consumption
L: leisure
N: hours worked
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π = 20 : non-labor income T = 10 : lump-sum tax
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Let us consider Boruvka/Sollin's algorithm as shown .
Note that Boruvka/Sollin algorithm selects several edges for
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One Step of Boruvka/Sollin's Algorithm
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2: Add to tree T.
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