The table below shows cost data for producing different amounts of higher education. The market for higher education produces positive externalities in the form of more informed voters and higher rates of technological growth. Use the given information to answer the questions below. Price Supply Private Demand Private+Social Demand 2 63 76 102 15 70 70 96 28 77 64 90 41 84 58 84 54 91 52 78 How much higher education would we expect to be produced in the free market? What is the socially optimal output of higher education?

The table below shows cost data for producing different amounts of higher education. The market for higher education produces positive externalities in the form of more informed voters and higher rates of technological growth. Use the given information to answer the questions below. Price Supply Private Demand Private+Social Demand 2 63 76 102 15 70 70 96 28 77 64 90 41 84 58 84 54 91 52 78 How much higher education would we expect to be produced in the free market? What is the socially optimal output of higher education?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Policymakers realize that, although education creates a positive benefit for those who obtain it, it also creates external benefits for the community where the educated individual resides. The graph depicts the marginal social cost (MSC) and the marginal social benefit (MSB) associated with education. On the graph, move the point, P, to the point representing the optimal level of education. Dollars (thousands) 100 90 80 70 60 50 40 30 20 10 0 0 2 4 MSC MSB 6 8 10 12 14 16 18 20 22 Years of schooling optimal schooling: 14 What is the socially optimal number of years of schooling for each citizen? years
What is a free market a) a store where goods are free b) an economy controlled by the government c) a system based on competition between privately owned businesses offering a similar product or service d) factories that do not have to pay rent
What would be the solution?
How does education, as an area of government spending, both positively and negatively impact a business?
Q=100-P Costs $6 to purchase a pack of cigarettes each pack smoked does $6 worth of health damage and $5 worth of secondhand health damage All consumers are aware of these costs 1. Due to an introduction of a hyper-effective tobacco fertilizer, the cost of producing a pack of cigaretts decreases to $1. How does this affect the level of smoking and the level of social loss? 2. suppose the government decides to pursue a Pigovian solution to eliminte social loss. What sort of of tax or subsidy would they implement and what is the resulting quantity of cigarette packs purchased? 3. In the case of the Coase Theorem, it is said that the socially efficient level of smokeing will occur without government intervention. how are property rights established and why might the Coase Theorem not apply in this setting?
7 The table shows cost data for producing different amounts of higher education. The market for higher education produces positive externalities in the form of more informed voters and higher rates of technological growth. Use the information in the table to answer the question Supply Price 3 18 33 48 63 27 30 33 36 39 × 39 Private Demand 37 30 23 16 9 Private + Social Demand 57 50 43 36 29 How much higher education would we expect to be produced in the free market?
What is a market-failure rationale for the government investing in education and training programs? a. Education likelyresults in a negative externality in production, so government investment corrects for the under-provision by private, unregulated markets. b. Education likely results in a positive externality in consumption, so government investment corrects for the under-provision by private, unregulated markets. c. Education likely results in a positive externality in production, so government investment corrects for the over-provision by private, unregulated markets. d. Education likely results in a negative externality in consumption, so government investment corrects for the over-provision by private, unregulated markets.
Which of the following might help to solve a free-rider problem? Select all that apply: using the political process to institute taxes to cover the cost of a public good asking fewer individuals to bear more of the cost to produce a public good to make up for free riders appealing to free riders' sense of morality and responsibility employing social pressure to encourage individuals to contribute to community projects and fundraising efforts
The table gives information about the marginal benefit and marginal cost of a trade school education. What is the value of the voucher that the government must provide to result in the efficient number of trade school students enrolled? The efficient number of trade school students will enroll if the government provides vouchers worth $ per student per year. >>> Remember that the amounts in the table are given in thousands of dollars. Marginal social Quantity Marginal (thousands private benefit benefit of students per year) 1 2 3 4 5 (thousands of dollars per student per year) 10 9 8 7 6 3219 11 Marginal cost 10 9 10 10 10 10 2999 10
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The graph shows the relevant curves in the paper production market Social MC In the absence of government intervention, how many reams of paper are purchased or sold? Specify your answer to two decimal places Supply or private MC 13.37- 10.2 рарer: reams Demand What is the efficient amount of paper this market should produce? Specify your answer to two decimal places. 0 19.34 5.14 10.64 13.84 Quantity (reams) раper: reams Compared to the socially optimal level of production, is too much or too little paper produced in this market? too little too much Price (S)
Question Consider two individuals, Adam and Eve, who have the following in-verse demand curves and face a marginal cost curve below. PA = 100 1/2 Qa; PE = 200 Qe MC = 2/3 Q (a) If the good is private, what is the equilibrium price and quantity in a competitive market? Is this outcome ecient? (b) If the good is public, ecient provision implies what price and quantity in the market?