University presidents around the country have convinced the Congress tosupport an educational program that will allow students to attend anycollege in the US they want (and can get into even SAIS!) for only $15,000in annual tuition and living expenses. This program would generate $45,000in extra after-tax earnings. The rest of society - i.e., taxpayers, pays costsof $25,000 in scholarship costs per student but receives only $12,000 indiscounted added tax revenues.a. Would this program pass the Hicks-Kaldor economic efficiency test?b. Is this the right test to use?c. Regardless of the answers to (a) and (b), is this a program that you, as aSAIS student, would support? Why yes or no?

a. No, this program would not pass the Hicks-Kaldor economic efficiency test. The Hicks-Kaldor…

a. Would this program pass the Hicks-Kaldor economic efficiency test? b. Is this the right test to use? c. Regardless of the answers to (a) and (b), is this a program that you, as a SAIS student, would support? Why yes or no?

a. Would this program pass the Hicks-Kaldor economic efficiency test? b. Is this the right test to use? c. Regardless of the answers to (a) and (b), is this a program that you, as a SAIS student, would support? Why yes or no?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

University presidents around the country have convinced the Congress to
support an educational program that will allow students to attend any
college in the US they want (and can get into even SAIS!) for only $15,000
in annual tuition and living expenses. This program would generate $45,000
in extra after-tax earnings. The rest of society - i.e., taxpayers, pays costs
of $25,000 in scholarship costs per student but receives only $12,000 in
discounted added tax revenues.
a. Would this program pass the Hicks-Kaldor economic efficiency test?
b. Is this the right test to use?
c. Regardless of the answers to (a) and (b), is this a program that you, as a
SAIS student, would support? Why yes or no?

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