The Following Questions Refer to the Graph Below

question 108

Multiple Choice

The Following Questions Refer to the graph below.
-Which of the following government actions will move the market equilibrium to the socially optimal number of years of education?

• A)A tax on education equal to $1,000
• B)A tax on education equal to $3,000
• C)A tuition subsidy equal to $1,000
• D)A tuition subsidy equal to $3,000
• E)Government provision of all education

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Definitions:

Net Taxes

Net taxes refer to taxes paid to the government minus transfer payments received from the government, showing the actual tax burden on individuals or businesses.

Transfer Payments

Payments made by the government to individuals without the expectation of a direct economic return, typically to assist with income support.

Income-Transfer Payments

Transfers of money from the government to individuals without any expectation of work or goods and services in return, often aimed at redistributing wealth.