1a worker with an annual discount rate of 5 currently


1. A worker with an annual discount rate of 5% currently resides in Tucson and is considering whether to remain there or move to Phoenix. There are three work periods remaining in the life cycle. If the worker stays in Tucson, she will earn $40,000 per year in each of the three periods. If she moves to Phoenix she will earn $42,000 per year in each of the three periods. What is the highest (present-value) migration cost she will be willing to incur and still make the move?

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Microeconomics: 1a worker with an annual discount rate of 5 currently
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