The marginal cost of educating a college student is $3,000 a year. The table shows the marginal benefit schedule of a college education. The marginal external benefit of a college education is a constant $1,000 per student per year. There are no public colleges. With no government involvement in college education, how many students enroll, what is the uition, and what is the deadweight loss created? With no government involvement in college education, s $ per student per year. million students enroll and tuition ..... Students (millions per year) 1 2 3 4 5 6 7 8 Marginal benefit (dollars per student per year) 5,000 3,000 2,000 1,500 1,200 1,000 800 500
Q: Suppose that in 2016 Canada's automobile manufacturers produced 2 million cars priced at $20 000…
A: Nominal national income measures the market value of final goods and services produced by residents…
Q: If patient insurance inquiries arrive at Blue Choice insurance with a mean rate of 3.6 calls per…
A: The objective of the question is to calculate the exponential probability of waiting more than 0.5…
Q: Wayne Enterprises had several salespersons that worked for a contract salary. To encourage them to…
A: A contract salary is a fixed amount of money agreed upon in a written employment contract, paid to…
Q: Refer to the figure to answer the following questions. Price level (P) B; E D; A F F; E LRAS E A D B…
A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…
Q: Scooter's Scooters is a large American manufacturer of electric scooters operating out of Boise.…
A: The manufacturing company Scooter is using a single manufacturing facility to produce all its…
Q: The graph below is Mendork's production possibility curve for the only two goods that it…
A: Production possibility curve depicts the combination of two goods that can be produced using the…
Q: Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demands and selling…
A: To find the revenue-maximizing prices for the Sky Eagle (Ps) and Horizon (Ph) cameras, we need to…
Q: Which action would decrease per unit costs? O a. Decreasing output when experiencing diseconomies of…
A: Economies of scale is when the increase in output decreases the long run average cost.Diseconomies…
Q: In Figure 12-3, one can tell from the graph that the monopolist will earn a positive profit only if…
A: A single seller in the market for goods is called a monopoly market. The marginal revenue is the…
Q: A firm has two plants. Plant 1 has the cost curve c₁(y₁) = y₁ and plant 2 has the curve c₂(y2) = y2.…
A: Cost curve of plant 1 : c1(y1) = y1Cost curve of plant 2 : c2(y2) = y22
Q: Suppose the multiplier has a value that exceeds 1, and there are no crowding out or investment…
A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…
Q: Suppose that the total revenue function of a firm is defined as TR= (P)(Q) where TR= f(Q). The usual…
A: Total Revenue:Total revenue is the total sales of the firm. TR is given by:
Q: 1. A price discriminating firm will charge the lowest price when price elasticity of demand is…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Price, Cost a P4 P3 P₂ P₁ 0 OD and B; Q1 Band D; Q2 Q₂ Q₁ Refer to figure above. If a negative…
A: Negative externalities are the harmful side effects arise out of production or consumption of some…
Q: Calculate Raphael's marginal revenue and marginal cost for the first seven shirts he produces, and…
A: Price times quantity gives the total revenue for a product. Profit is the difference between total…
Q: Using the following graph, which statement is true about opportunity costs of production for a…
A: A key idea in economics and decision-making is opportunity cost. When a decision is made,…
Q: Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and…
A: This can be defined as the most effective and efficient form of market in which no single producer…
Q: What happens to the original budget line if the price of good ? doubled? (i.e., Will there be a…
A: A Budget Line is a line of constraint for a consumer. It constrains consumers from consuming and…
Q: A consumer derives all of his utility from a single good; he devotes his entire income $10 to…
A: The concept of Equivalent Variation (EV) measures the change in income required to maintain a…
Q: A firm estimates its long-run production function to be Q = -0.0050 K3L3 + 15 K2L2 Suppose the firm…
A: The marginal product defines the additional output produced by one extra unit of input while holding…
Q: Assume the cost of aluminum used by soft-drink companies increases. Which of the following correctly…
A: Economics uses the term "demand" to describe how much of an item or service consumers are willing…
Q: Suppose the price elasticity of demand for bread is 1.5. If the price of bread falls by 6 percent,…
A: Price elasticity of demand refers to the percentage change in the quantity demanded of a goods or…
Q: Fill in the aggregate saving column in the following table. (Include a minus sign if necessary.)…
A: MPC stands for Marginal Propensity to Consume. It is a concept in economics that represents the…
Q: Which of the following would increase the current account balance of the United States? O an…
A: The current account is a component of a country's balance of payments that tracks the flow of goods,…
Q: PRICE 16 14 12 10 00 6 4 Graph (a) Demand 1 2 3 45 QUANTITY Supply (Refer to Graph (a)) Total…
A: A consumer purchases a product and pays an amount which is often less than the amount that they are…
Q: (Figure: Output Levels II) The socially optimal output level could be achieved by a government quota…
A: The socially optimal point is where the allocation of resources maximizes overall societal welfare,…
Q: The following graph illustrates the weekly demand curve for motorized scooters in Madison. Use the…
A: Price Elasticity:Price elasticity computes the responsiveness of demand for a product to the change…
Q: Initially, an economy is in long-run equilibrium with a real GDP of $4 trillion. Suppose that the…
A: Aggregate demand is the finished goods and services total demand that is produced in the economy. It…
Q: Using the direct strategy is occasionally more effective in certain situations where you must…
A: The direct strategy is a communication approach that delivers bad news straightforwardly and…
Q: Your insured has just purchased a snowmobile and wants coverage for a fourteen (14) year old son to…
A: In its entirety, "O.A.P. 1" stands for Ontario Automobile Policy 1, a standard auto insurance policy…
Q: Consider the pharmaceutical company Mylan that produces epinephrine injection devices called…
A: Substitute goods are the alternative options that are presented to the consumers, which yield…
Q: Consider an individual who consumes two goods, x and y. Her utility function is U(x, y) = x¹/³y2/3…
A: Utility function : U(x , y ) = x1/3 y2/3Price of x = Price of y = 1 Income = 50 Gift certificate =…
Q: Suppose a firm operating in a perfectly competitive market, as shown in FIGURE 10: FIGURE 10 TR 20…
A: Total income, often seen as total revenue, is what a business makes by selling goods or services.…
Q: Pat's Pizza Kitchen has the following total cost schedule. Output (pizzas per hour) Total cost…
A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…
Q: The Foreign Exchange Market The Jamaican dollar experienced a rapid depreciation in the exchange…
A: The issue pertains to international finance and economics, more especially to the selection of an…
Q: In 20 the unemployment rate in the United States went as low as 3.7%, as measured by the Bureau of…
A: The unemployment rate measures the % of the labor force that is currently unemployed and seeking…
Q: When the relative price of a country’s goods is high, then over time the relative price tends…
A: The term "depreciation" in finance and accounting describes how an asset's value decreases over…
Q: Which of the following is a benefit of government debt? Instructions: You may select more than one…
A: Economic Growth:Economic growth implies the increase in the production and consumption of products…
Q: 1. Suppose we have the following demand and supply equations: D(p)-200-p S(p) 150+p A. What is the…
A: Equilibrium in economics describes a situation in which the amount of a good or service supplied and…
Q: The accompanying table gives domestic supply and demand schedules for a product. Suppose that the…
A: This can be described as a terminology in economics that represents the amount of commodities and…
Q: PW(benefits) PW(operating and maintenance costs) PW(capital costs) Project A $20,000,000 $5,000,000…
A: Disclaimer: As per our guidelines we are allowed only to solve 3 subparts of the question but I have…
Q: 1. If the number of people with insurance increases, then what will most likely occur? a. a. a. a.…
A: Insurance is a risk management that protects people from unforeseen events in the future. For…
Q: 76 72 68 64 60 56 52 6 48 44 40 36 32 28 24 20 16 12 8 4 Price Domestic Supply Refer to Figure 9-17.…
A: Deadweight loss in the context of tariffs refers to the economic inefficiency that occurs when a…
Q: 4. Minimum wage legislation The following graph gives the labor market for the fast-food industry of…
A: Equilibrium in the labor market occurs at the intersection of the labor demand and the labor supply…
Q: 5. The market for loanable funds and government policy The following graph shows the loanable funds…
A: The government provides tax credits to consumers or businesses to help them pay less in taxes. Tax…
Q: Which of the following instruments pays the holder of the instrument a fixed interest payment every…
A: A fixed-payment loan is one for which the borrower agrees to pay the lender predetermined amounts…
Q: A new manufacturing facility will produce two products, each of which requires a drilling operation…
A: The equivalent annual cost represents the annual cost of a project or investment over its entire…
Q: How did the lauch of Apple's ipad effect the competitive market environment? High prices and high…
A: The launch of Apple's iPad in 2010 marked a significant shift in the technology and consumer…
Q: mize profit n producing two goods that are related in conse O total marginal revenue equals total…
A: Marginal revenue is the change in total revenue when one additional unit of good is sold out. The…
Q: 1/6/23 11. With these equations: C = 230 +0.66 Yd I = 470₁ 6 = 280-0₁13Y₁ X=470, M=555₁ and T =…
A: Consumption, in economics, refers to the use of goods and services by individuals, households, or…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- Most countries today have subsidised the provision of education. Consider animaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to eachstudent enrolled in tertiary education.(a) Depict, with the help of a figure, the initial market for tertiary education inGondolin, assume that: 1) education was left to the competitive free market; 2)the marginal private benefit is equal to the marginal social benefit; 3) themarginal private cost is equal to the marginal social cost. Now describe, usingthe help of the figure, the effect of the government subsidy on the price andquantity traded of tertiary education, where the X axis of the figure should bethe quantity of students enrolled in tertiary education. You do not need to useactual numbers – focus on the direction of change in price and quantity tradedcaused by the subsidy.(b) Identify the area of the figure you drew in (a) that depicts the total size of thesubsidy paid by the government to the students enrolled in tertiary…Explain a positive and negative externality that you have recently consumed. Please relate your answer to the characteristics of elasticity. Why does the government have to get involved when an externality is present in the market?Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education.(a) Depict, with the help of a figure, the initial market for tertiary education inGondolin, assume that: 1) education was left to the competitive free market; 2)the marginal private benefit is equal to the marginal social benefit; 3) themarginal private cost is equal to the marginal social cost. Now describe, usingthe help of the figure, the effect of the government subsidy on the price andquantity traded of tertiary education, where the X axis of the figure should bethe quantity of students enrolled in tertiary education. You do not need to useactual numbers – focus on the direction of change in price and quantity tradedcaused by the subsidy.(b) Identify the area of the figure you drew in (a) that depicts the total size of thesubsidy paid by the government to the students enrolled in…
- Some economists argue that early child care generates an external benefit to society. Consider the following supply-and-demand graph for early childhood education. A. How does the market equilibrium differ from what is best for society? B. If the government was going to provide a per-unit subsidy in this market in order to achieve the socially optimal outcome, how large of a subsidy would the government ne to provide? C. How much in total would the government need to spend in this market each month to achieve a socially optimal outcome? Price ($ per month) Supply $1,300 $1,200 $1,000 $900 Marginal social benefit Marginal private benefit (demand) 23 26 Quantity (millions per month)Some economists claim that early child care generates an external benefit to society. a. What is the market equilibrium? What is the socially optimal outcome? How do they differ? b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? c. How much is the total government subsidy each month to reach a socially optimal outcome?The United States government subsidizes many so-called green companies. For instance, it has given millions of dollars to solar panel companies. In the market for solar power, illustrate what the government subsidies mean.
- When does a subsidy that benefits consumers result in a more efficient allocation of a resource? A when the good being produced or consumed is not scarce B when the good being produced or consumed generates a negative externality when the good being produced or consumed generates a positive externality D when the equilibrium price of the good is one that consumers don't likeMost countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. The original assumption for Gondolin stated that the marginal private benefit is equal to the marginal social benefit. Now instead assume that the marginal social benefit of tertiary education is greater than the marginal private benefit. That is, assume there is a positive externality associated with having a tertiary education. Draw this in a new figure. Is the deadweight loss from the subsidy increased or decreased with the introduction of the positive externality? Why?O Macmillan Learning Specialized electronic batteries, such as those for laptops, are hard to dispose of safely, yielding excess pollution when one gets thrown away. Suppose that producing these batteries creates a social cost of approximately $150 per battery. Please shift the appropriate curve or curves to reflect this social cost. The new price is about $ The new quantity is Ithousand. Price (S) 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 Supply Demand 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Quantity of Laptops (thousands)
- The table below describes the market for higher education. Higher education confers positive externalities on society, and so the private+social marginal benefits are higher than the private marginal benefits. 2 Quantity 10,000 11,000 12,000 13,000 14,000 Calculate the value of the subsidy that society would need to allocate to higher education in order to achieve the social equilibrium. Express your answer without units (i.e., if your answer is "$500", type "500" in the answer box). Type your answer.... # JOE 3 E W 5 X D 16 20 F3 C $ 4 Private marginal benefits $80,000 $75,000 $70,000 $65,000 $60,000 888 FA R F V % 5 T F5 6 MacBook Air B F6 Y Private+ social marginal benefits $90,000 $85,000 $80,000 $75,000 $70,000 & 7 H F7 tv NA U N * 8 J F8 1 ( 9 K M Marginal costs $70,000 $75,000 $80,000 $85,000 $90,000 O .O. L Aa P zoom3. How does the optimal size of the subsidy for education vary with the size of the (positive) consumption externality? Justify your answer graphically.Commun U ASTRAL15963907 Su Home | Shöreline C E D Multiple Choice O Quantity Refer to the provided supply and demand graph for a product. In the graph, line S is the current supply of this product, while line St is the optimal supply from the society's perspective. One solution to this externality problem is to give consumers a subsidy of the amount FG per unit. tax producers by the amount DE per unit. give producers a subsidy of the amount AB per unit tax consumers by the amount EF per unit Seved Save