Your student group is setting up an internship fair. You invite companies looking for interns and students looking for internships and offer them a place to connect. The UofT wants to encourage this event and offers a per-internship of $5000. Whom do you recommend they give the $5000 to?--the student who gets the internship, the company that hires the student or split the money between them equally? What would be the effect of a $5000 subsidy on the number of internships? Why?

Your student group is setting up an internship fair. You invite companies looking for interns and students looking for internships and offer them a place to connect. The UofT wants to encourage this event and offers a per-internship of $5000. Whom do you recommend they give the $5000 to?--the student who gets the internship, the company that hires the student or split the money between them equally? What would be the effect of a $5000 subsidy on the number of internships? Why?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter29: Resource Markets

Section: Chapter Questions

Problem 16E

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Your student group is setting up an internship fair. You invite companies looking for interns and students looking for internships and offer them a place to connect. The internship payment is determined as if the fair was a market. Your university wants to encourage this event and offers you an internship subsidy. Whom do you recommend they give the subsidy to?--the students, the companies, both? How much of a subsidy would you recommend?
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