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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
6Â Â Â Â Â Â Â Â Â Â Â Â Suppose the following model describes the relationship between annual salary (salary) and the number of previous years of labor market experience (exper):
log(salary)  10.6  .027 exper.
(i)      What is salary when exper  0? When exper  5? (Hint: You will need to exponentiate.)
(ii)Â Â Â Â Â Use equation (A.28) to approximate the percentage increase in salary when exper
increases by five years.
(iii)   Use the results of part (i) to compute the exact percentage difference in salary when exper  5 and exper  0. Comment on how this compares with the approximation in part (ii).
Â
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