-The Above Figure Shows the Marginal Private Benefit and Marginal

question 23

Multiple Choice

-The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then the private market outcome is inefficient because

• A) no students will go to college.
• B) society places less value on educating the next student than it will cost society to educate that student.
• C) society places greater value on educating the next student than it will cost society to educate that student.
• D) the marginal cost will shift upward.

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Definitions:

Stakeholders

Individuals or groups that have an interest, stake, or investment in an organization and can affect or be affected by its operations.

Local Government

The administration of a specific area such as a city, town, or district, providing services and enforcing regulations at a community level.

Society

A large group of individuals who live together in a defined territory, sharing a common culture, institutions, and collective activities.

Free-market Capitalism

An economic system where prices for goods and services are determined by the open market and by consumers, with minimal government intervention.