Assume that unskilled workers (no college education) earn $30,000 per year, to b

Question

Assume that unskilled workers (no college education) earn $30,000 per year, to become a skilled worker (college educated) one must invest $200,000; and the return on investments average 8%. what are the skilled worker's pay premium and wage? O Skilled workers will earn a pay premium of $4,800 and a salary of $34,800. Skilled workers will earn a pay premium of $$6,000 and a salary of $36,000. Skilled workers will earn a pay premium of $20,000 and a salary of $50,000. Skilled workers will earn a pay premium of $16,000 and a salary of $46,000. Skilled workers will earn a pay premium of $8,000 and a salary of $$38,000.

Explanation / Answer

The correct answer is: c)

Reason: return on investment = 8% of 200,000 = 16,000

Thus, skilled workers will earn 46,000 with a premium of 16,000.

Thanks!

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