PROBLEMAssume that household 1 and household 2 has the following demands for education(a private good) (in units of load per year).Household 1Household 2P (Php)36,00045,00060,000Qd (units per yr)60P (Php)36,00045,00060,000Qd70425824361. Determine the market demand for education. (5 points)2. In an axes, sketch the market demand curve for education.3. Assume that the supply for education (representing all private suppliers ofeducation) indicates the following:P30,00038,00045,00050,00060,000Qs8092100110124Sketch the market supply curve on the same set of axes (developed innumber 2).(Graphical illustration: 10 points)4. What is the market equilibrium combination of private education in themarket? (5 points)5. Explain how the condition of efficiency in the market for a private good isachieved. (10 points)6. Explain why, at this equilibrium, MRS, of HH1 is equal to MRS, of HH2 isequal to MRT (where e stands for education, and y stands for other goodsin households market basket), a Pareto efficient condition. (10 points)

Price Qd1 (Household 1) Qd2 (Household 2) Total Qd(Qd1+Qd2) 36000 60 70 130 45000 42 58…

Assume that household 1 and household 2 has the following demands for education (a private good) (in units of load per year). Household 1 P (Php) 36,000 Household 2 P (Php) 36,000 45,000 60,000 Qd (units per yr) 60 Qd 45,000 60,000 42 24 70 58 36 1. Determine the market demand for education. (5 points) 2. In an axes, sketch the market demand curve for education. 3. Assume that the supply for education (representing all private suppliers of education) indicates the following: P Qs 30,000 38,000 45,000 50,000 60,000 80 92 100 110 124 Sketch the market supply curve on the same set of axes (developed in number 2). (Graphical illustration: 10 points) 4. What is the market equilibrium combination of private education in the market? (5 points)

Assume that household 1 and household 2 has the following demands for education (a private good) (in units of load per year). Household 1 P (Php) 36,000 Household 2 P (Php) 36,000 45,000 60,000 Qd (units per yr) 60 Qd 45,000 60,000 42 24 70 58 36 1. Determine the market demand for education. (5 points) 2. In an axes, sketch the market demand curve for education. 3. Assume that the supply for education (representing all private suppliers of education) indicates the following: P Qs 30,000 38,000 45,000 50,000 60,000 80 92 100 110 124 Sketch the market supply curve on the same set of axes (developed in number 2). (Graphical illustration: 10 points) 4. What is the market equilibrium combination of private education in the market? (5 points)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 24P: Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the...

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