Suppose That an MBA Degree Creates No Externality Because the Benefits

question 132

Multiple Choice

Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If the government offers subsidies for MBAs, then which of the following statements is correct?

• A)The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs.
• B)The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs.
• C)The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs.
• D)There is not enough information to answer the question.

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Symbol

An object, sign, or image used to represent something else by association, resemblance, or convention.

Business

The practice of engaging in commerce, manufacturing, or specified professional activities for profit.

Kyoto Protocol

An international agreement aimed at controlling and reducing the emission of greenhouse gases to combat climate change, initially adopted in Kyoto, Japan, in 1997.