Use the Figure Below to Answer the Following Questions

question 82

Multiple Choice

Use the figure below to answer the following questions.

Figure 16.3.3
-Refer to Figure 16.3.3.The figure shows the marginal private benefit and marginal social cost of a university education.Society's external benefit from university graduates is $10,000 each.With no subsidy

• A)no students go to university.
• B)less than 10 million students go to university.
• C)10 million students go to university.
• D)more than 10 million students go to university.
• E)none of the above.

---

Definitions:

Black-Scholes Model

A mathematical model used for pricing options, considering factors such as the stock price, exercise price, and time until expiration.

Strike Price

The fixed price at which the holder of an option can purchase (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Put Option

A put option is a financial contract that gives the holder the right, but not the obligation, to sell a certain amount of an underlying asset at a specified price within a specific time frame.