The graph shows the demand for university education. The marginal cost of educating a student is a constant $6,000 a year and education creates an external benefit of a constant $2,000 per student per year. If all universities are public, calculate the tuition that will achieve the efficient number of students. How much will taxpayers have to pay? Draw the marginal social cost curve. Label it MSC. Draw the marginal social benefit curve. Label it MSB. Draw a line that shows the tuition that schools charge to achieve the efficient number of students. Label it Tuition. The tuition that universities charge is $ S ... The amount paid by taxpayers is 5 S thousand per student. thousand per student. 8.0- 7.0- 6.0 5.0 4.0- 3.0 2.04 1.0 Price and cost (thousands of dollars per student per yea Q 0.0- 0 A DEMB 10 20 30 40 50 60 70 80 Students (thousands per year) >>> Draw only the objects specified in the question 5
The graph shows the demand for university education. The marginal cost of educating a student is a constant $6,000 a year and education creates an external benefit of a constant $2,000 per student per year. If all universities are public, calculate the tuition that will achieve the efficient number of students. How much will taxpayers have to pay? Draw the marginal social cost curve. Label it MSC. Draw the marginal social benefit curve. Label it MSB. Draw a line that shows the tuition that schools charge to achieve the efficient number of students. Label it Tuition. The tuition that universities charge is $ S ... The amount paid by taxpayers is 5 S thousand per student. thousand per student. 8.0- 7.0- 6.0 5.0 4.0- 3.0 2.04 1.0 Price and cost (thousands of dollars per student per yea Q 0.0- 0 A DEMB 10 20 30 40 50 60 70 80 Students (thousands per year) >>> Draw only the objects specified in the question 5
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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