What is the socially optimal number of years of schooling for each citizen?optimal schooling: 14yearsAssuming that the marginal social benefits of education are completely externalized from the educated individual, how largewould a Pigouvian subsidy need to be in order to reach this optimal level of schooling?Pigouvian subsidy: $thousand Policymakers realize that, although education creates a positive benefit for those who obtain it, it also creates external benefitsfor the community where the educated individual resides. The graph depicts the marginal social cost (MSC) and the marginalsocial benefit (MSB) associated with education.On the graph, move the point, P, to the point representing the optimal level of education.Dollars (thousands)1009080706050403020100024MSCMSB6 8 10 12 14 16 18 20 22Years of schoolingoptimal schooling: 14What is the socially optimal number of years of schooling for each citizen?years

Externality refers to the situation of a person engaging in activities that may influence the…

What is the socially optimal number of years of schooling for each citizen? optimal schooling: 14 Pigouvian subsidy: $ years Assuming that the marginal social benefits of education are completely externalized from the educated individual, how large would a Pigouvian subsidy need to be in order to reach this optimal level of schooling? thousand

What is the socially optimal number of years of schooling for each citizen? optimal schooling: 14 Pigouvian subsidy: $ years Assuming that the marginal social benefits of education are completely externalized from the educated individual, how large would a Pigouvian subsidy need to be in order to reach this optimal level of schooling? thousand

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 11P

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