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5. Suppose Mike’s wage-schooling locus is given by: Years of Schoo ' 9 $18 500 10 $21 000 11 $23 000 12 $24 800 13 $26 00 14 $27 000 Derive the marginal rate of return for each year of schooling. How many years of schooling will Mike attend if his discount rate is 4 percent? What if his discount rate is 12 percent? (2 points)
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