Use the Figure Below to Answer the Following Questions

question 106

Multiple Choice

Use the figure below to answer the following questions.

Figure 16.3.3
-Refer to Figure 16.3.3. The figure shows the marginal private benefit and marginal social cost of a university education. If society's external benefit from university graduates is $10,000 each, then

• A)a subsidy of $10,000 per student paid to the universities achieves efficiency.
• B)a tax of $10,000 per student imposed on the universities achieves efficiency.
• C)10 million students per year is the efficient number students.
• D)a subsidy of $20,000 per student paid to the universities achieves efficiency.
• E)a tax of $5,000 per student paid by taxpayers achieves efficiency.