a. If people base their education decisions only on the marginal private benefit of education, how many years of education will they choose to get? b. What is the socially optimum number of years of education people should get? c. If the government decides to provide a subsidy to every student in order to encourage them to get the socially optimal number of years of education, how much, per year, does this subsidy have to be? /

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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W ECON 2100
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4. Exhibit 17-8 represents the consumer market for higher education.
Exhibit 17-8
dollars per
year
marginal
45,000
cost
40,000
35,000
30,000
5,000
20,000
marginal social
benefit
15,000
10,000
marginal private
1
4 5
6
7
years of higher
education
a. If people base their education decisions only on the marginal private benefit of education, how
many years of education will they choose to get?
b. What is the socially optimum number of years of education people should get?
c. If the government decides to provide a subsidy to every student in order to encourage them to get
the socially optimal number of years of education, how much, per year, does this subsidy have to
be?/
Page 4 of 4
627 words
English (United States)
Focus
200%
Transcribed Image Text:合日ら W ECON 2100 Compatibility Mode Home Insert Draw Design Layout References Mailings Review View Share O Comments 4. Exhibit 17-8 represents the consumer market for higher education. Exhibit 17-8 dollars per year marginal 45,000 cost 40,000 35,000 30,000 5,000 20,000 marginal social benefit 15,000 10,000 marginal private 1 4 5 6 7 years of higher education a. If people base their education decisions only on the marginal private benefit of education, how many years of education will they choose to get? b. What is the socially optimum number of years of education people should get? c. If the government decides to provide a subsidy to every student in order to encourage them to get the socially optimal number of years of education, how much, per year, does this subsidy have to be?/ Page 4 of 4 627 words English (United States) Focus 200%
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