a. Using a 10% rate of interest, calculate the present value of $2000 to
be received one year from now.
b. Using a 10% rate of interest, calculate the present value of $8000 to
be received five years from now.
c. Using a 10% rate of interest, calculate the future value of $1000 two
years from today.
Conjure up one example of job skills that would be general and another example
that involves skills specific that are specific to one employer.
Explain why it is that employers are more likely to bear the majority of
costs associated with skills that are job specific as opposed to skills that
are more generally useful.
Employers often have policies in which they pay tuition for employees on
condition that these employees remain with the firm for 1, 2 or 3 additional
years. Explain this in terms of human capital analysis.
Assume an employer is considering employing an individual who must be trained
on the job, but the skills to be imparted are general. Assume that the value
of this individual to his or her employer during training is three dollars
per hour. Using human capital analysis suggest how the employer might adjust
his or her plans if a minimum wage of $5 is imposed.