If the Marginal Private Benefit of Attending College for Shelly

question 174

Multiple Choice

If the marginal private benefit of attending college for Shelly is $40,000 and the marginal external benefit is $15,000,she will attend college if the cost of attendance is no more than

• A) $55,000.
• B) $45,000.
• C) $40,000.
• D) $25,000.
• E) $15,000.

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Definitions:

Discretionary Expenses

Non-essential spending or expenses that can be reduced or eliminated without impacting the fundamental living standard.

Net Income

The total profit remaining after all expenses, taxes, and deductions have been subtracted from total revenue.

Transfer Pricing

The pricing of goods, services, or intangible properties transferred within divisions of a company or between subsidiaries.

Income Tax Rate

The percentage of income paid to the government as tax.