Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 17, Problem 9SPA
To determine
Tuition that achieves efficient number of students.
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Students have asked these similar questions
This graph shows the market for
antifreeze. Use it to answer the next
questions.
8
6.
1
100 200 300 400
500
600 700 800 900 1000 1100
Quantity
Question 8
The production of antifreeze creates
pollution. The pollution imposes a
cost of $2 per gallon on society.
What is the marginal social cost of
the 500th gallon of antifreeze?
Answer is a whole number; do not
include a dollar sign (e.g. 10).
B. The figure below shows the market for education.
20
S- MSC:
12
MSE
D- MD
2
4
10
Quantity (millions of students per yeorl
i.
'Education has externalities'. Explain this statement.
ii.
If the market is competitive and left unregulated, how many students will be enrolled
per year? Are the resources allocated efficiently when such number of students are
enrolled per year? Explain using the graph above.
iii.
In the figure above, what kind of government intervention is required to achieve the
optimal or efficient number of students? What is the optimal number of students? How
much intervention needed to achieve the optimal number of students?
luian arc cost lihousa-cs of delan per stdent
Explain the graph that I have provided about the PRIVATE COST and SOCIAL COST of EDUCATION.
Chapter 17 Solutions
Macroeconomics
Ch. 17.1 - Prob. 1RQCh. 17.1 - Prob. 2RQCh. 17.2 - Prob. 1RQCh. 17.2 - Prob. 2RQCh. 17.2 - Prob. 3RQCh. 17.2 - Prob. 4RQCh. 17.3 - Prob. 1RQCh. 17.3 - Prob. 2RQCh. 17.3 - Prob. 3RQCh. 17.4 - Prob. 1RQ
Ch. 17.4 - Prob. 2RQCh. 17.4 - Prob. 3RQCh. 17.4 - Prob. 4RQCh. 17 - Prob. 1SPACh. 17 - Prob. 2SPACh. 17 - Prob. 3SPACh. 17 - Prob. 4SPACh. 17 - Prob. 5SPACh. 17 - Prob. 6SPACh. 17 - Prob. 7SPACh. 17 - Prob. 8SPACh. 17 - Prob. 9SPACh. 17 - Prob. 10APACh. 17 - Prob. 11APACh. 17 - Prob. 12APACh. 17 - Prob. 13APACh. 17 - Prob. 14APACh. 17 - Prob. 15APACh. 17 - Prob. 16APACh. 17 - Prob. 17APACh. 17 - Prob. 18APACh. 17 - Prob. 19APACh. 17 - Prob. 20APACh. 17 - Prob. 21APACh. 17 - Prob. 22APACh. 17 - Prob. 23APACh. 17 - Prob. 24APACh. 17 - Prob. 25APACh. 17 - Prob. 26APACh. 17 - Prob. 27APACh. 17 - Prob. 28APACh. 17 - Prob. 29APACh. 17 - Prob. 30APA
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Similar questions
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- Explain why economists might say that the market for higher education demonstrates externalities and market failure.arrow_forwardUse the graph attached below as a starting point (either download it or print it out). Add curves, labels, etc. to this graph in order to show the following: 1. Show that this good has a $4/unit negative externality (external cost), such as pollution. 2. Shade the area that represents the Deadweight Loss (lost gains from trade) caused by the external cost. 3. Show a tax or subsidy wedge (whichever you think is appropriate) that will solve the problem of the external cost. 4. Show the socially optimal level of production that the Pigouvian tax or subsidy above will help the market to achieve. You may use software or pencil and paper to complete this graph. Upload it here when you are done.arrow_forwardThe 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 private and the government offers vouchers to those who enroll, calculate the value of the voucher that will achieve the efficient number of students. Draw the marginal social benefit curve. Label it MSB. Draw an arrow at the efficient number of students that shows the value of the voucher that achieves the efficient number of students. The value of the voucher that achieves the efficient number of students is $ >>> Remember that the price given on the y-axis is in thousands of dollars. a student. C 10- 9- 8- 7- 6- 5- 4 3- 2- 1 0- Price and cost (thousands of dollars per student per yea 0 10 S=MC 30 40 50 20 Students (thousands per year) >>> Draw only the objects specified in the question. D=MB 60arrow_forward
- The following data refers to the number of logging operations working in a stretch of tropical rainforest per week. Excluding externalities, the private cost of a logging operation is $25 thousand per week. Logs sell for $1 a piece. Fill in the chart below. # of operations total harvest average harvest average revenue marginal harvest marginal revenue marginal profit 0 0 1 40 2 75 3 105 4 130 5 150 6 165 7 175 8 180 What is the number of logging operations in the forest that maximizes total profit? How much total resource rent is generated at this level of harvest? With open access to the forest, how many folks will wind up logging? With open access, will there be any resource rent earned by the loggers? Suppose the total externalities associated with deforestation could be valued at $10,000 per operation. What is the efficient number of operators? What is the open…arrow_forwardIs education a public good? Does education have external benefits? If so, what are some of those public benefits? In your opinion are the external benefits large or small? Why? What should government do to promote the efficient provision of products that have external benefits? If you think that government should put more resources into education, what might be some of the opportunity costs of that decision? How would an economist determine the right amount of government support for education?arrow_forwardWhich of the following does not create market failure? A. Oil refining creates air pollution B. Airport creates noise pollution C. Production in a competitive market D. A good that is non-rival and non-excludablearrow_forward
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