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

question 127

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:

Cash Disbursements

Financial transactions involving the outflow of cash, typically from an entity to vendors or employees, for expenses or purchases.

Beginning Cash Balance

The Beginning Cash Balance is the amount of cash that a company has at the start of a new accounting period, carried over from the end of the previous period.

Cash Disbursements

Money being paid out by a company during a period, including expenses, debt payments, and purchase of assets, usually tracked through a cash disbursements journal.

Materials Purchases

The total cost of raw materials bought by a company for use in its manufacturing process during a specific period.