-The Table Above Provides Information About the Marginal Private Benefit

question 60

Multiple Choice

-The table above provides information about the marginal private benefit for education. The marginal private cost, which also equals the marginal social cost, of educating a student is $16,000 per year and does not change as more students are educated. There is an external benefit from education that is equal to $12,000 per student year and does not change as more students are educated. If the government subsidises education, how much should the subsidy be in order to attain the efficient level of enrollment?

• A) $4,000
• B) $16,000
• C) $8,000
• D) $12,000

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Definitions:

Wages

The compensation received by employees for their labor, typically expressed as an hourly rate or annual salary.

Products

Goods or services offered by businesses to consumers in exchange for payment.

Prices

The amount of money required to purchase a good or service, determined by factors like supply and demand in the market.

Ownership

The legal right or title to an asset or property, implying control and responsibility over it.