-The table above provides information about the marginal private benefit of education. The marginal private cost, which also equals the marginal social cost, of educating a student is $16,000 per year and does not change as more students are educated. There is an external benefit from education that is equal to $12,000 per student- year and does not change as more students are educated. If the market for education is competitive and unregulated, the equilibrium quantity of education will be _______ and the tuition will be _______.
A) 20,000 student- years; $20,000
B) 60,000 student- years; $12,000
C) 80,000 student- years; $8,000
D) 40,000 student- years; $16,000

Question

-The table above provides information about the marginal private benefit of education. The marginal private cost, which also equals the marginal social cost, of educating a student is $16,000 per year and does not change as more students are educated. There is an external benefit from education that is equal to $12,000 per student- year and does not change as more students are educated. If the market for education is competitive and unregulated, the equilibrium quantity of education will be _______ and the tuition will be _______.
A) 20,000 student- years; $20,000 
B) 60,000 student- years; $12,000 
C) 80,000 student- years; $8,000 
D) 40,000 student- years; $16,000

Quizplus · Accepted Answer

In a competitive and unregulated market, the equilibrium quantity of education is determined where the marginal private benefit (MPB) equals the marginal private cost (MPC), which is $16,000. The table is not visible, but based on the given choices, the correct equilibrium must be where the tuition equals the marginal private cost of $16,000, which is the scenario described in option D. External benefits do not affect the equilibrium in an unregulated market since only private costs and benefits are considered by the participants.

-The Table Above Provides Information About the Marginal Private Benefit