If Tuition at a College Is $30,000 and the External

question 127

Multiple Choice

If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000,then
i.in the absence of any government intervention,the number of students graduating is less than the efficient number.
ii.the government could increase the number of graduates by giving the college a $10,000 subsidy per student.
iii.the government could increase the number of graduates by giving the students $10,000 vouchers.

• A) i only
• B) i and ii
• C) i and iii
• D) ii and iii
• E) i, ii, and iii

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