Use the figure below to answer the following questions.

Figure 16.3.3
-Refer to Figure 16.3.3. The figure shows the marginal private benefit and marginal social cost of a university education. Society's external benefit from university graduates is $10,000 each. With no subsidy,
A)no students go to university.
B)less than 10 million students go to university.
C)10 million students go to university.
D)more than 10 million students go to university.
E)the market is efficient.

Question

Use the figure below to answer the following questions.
  
Figure 16.3.3
-Refer to Figure 16.3.3. The figure shows the marginal private benefit and marginal social cost of a university education. Society's external benefit from university graduates is $10,000 each. With no subsidy,
A)no students go to university. 
B)less than 10 million students go to university. 
C)10 million students go to university. 
D)more than 10 million students go to university. 
E)the market is efficient.

Quizplus · Accepted Answer

With no subsidy, the market equilibrium is at the point where the marginal private benefit equals the marginal social cost. At this point, 10 million students go to university.

Use the Figure Below to Answer the Following Questions