Suppose That an MBA Degree Creates No Externality Because the Benefits

question 377

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 there are no government 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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