Jill has just finished high school. She will live for two more periods, and she needs to choose a career path. She can either take a job right now as an Uber driver $28,000 in each of the two periods.Or she can get more education in period one to become an economist. Tuition in the first period would be $25,000 and she would earn $85,000 in the second period with her economics degree.

a) Suppose the discount rate is 5% (r=.05).If Jill wants to maximize the present value of her lifetime income, what should she do? Explain and show your calculations.

b) Suppose the discount rate is 10% (r= .10). What should Jill do? Explain and show your calculations

c) Suppose the discount rate is 5% but suppose tuition costs are $30,000. What should Jill do? Explain and show your calculations.

Jack 22 years old and just graduated college. Jack plans on working to age 67 and is planning the timing of on-the-job training (OJT) investments over his career. Explain how each of the following events changes the optimal OJT investment at every age:

a) the market determined rental rate ($R) to an efficiency unit falls.

b) Jack's discount rate decreases

c) The government passes legislation delaying retirement age until age 70.

d)Technological progress is such that much of the OJT acquired at any given age becomes obsolete within the next 10 years.