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

question 79

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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Definitions:

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