## 1. Ralph is trying to decide whether to go to graduate school. If he spends two

1. Ralph is trying to decide whether to go to graduate school. If he spends two years in graduate school paying \$15000 tuition each year he will get a job that will pay \$60000 per year for the rest of his working life. If he does not go to school he will go into the workforce immediately. He will then make \$30000 per year for the next three years \$45000 for the following three years and \$60000per year every year after that. If the interest rate is 10 percent is graduate school a good financial investment?2. Suppose your uncle gave you an oil well like the one described in Section 15.8. (Marginal production cost is constant at \$10.)The price of oil is currently \$20 but is controlled by a cartel that accounts for a large fraction of total production. Should you produce and sell all your oil now or wait to produce? Explain your answer.

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