Exam 9: Investments in Human Capital: Education and Training

The market for engineers is initially in equilibrium.The demand curve for engineers shifts up.Assume the naive cobweb model holds such that in the first period,the labor supply is fixed,in the next period,wages are fixed,and so on.In period three,how will the wage rate compare to the new long run level?

Age/earnings profiles for full-time,year-round female workers are flatter than age/earnings profiles for full-time,year-round male workers with comparable education.How does human capital theory account for this phenomenon?

Suppose that a technological innovation causes the price of capital to decrease and that,in turn,this causes the demand for college graduates to increase and the demand for high school graduates to decrease.Use human capital theory to predict the effect of the technological innovation on college enrollment rates of 18-year olds.Explain using either the present value method or the internal rate of return method.

If average lifetime earnings of both high school and college graduates double,then the number of people attending college will consequently