(b) Identify the area of the figure you drew in (a) that depicts the total size of the subsidy paid by the government to the students enrolled in tertiary education in Gondolin. Who gains and who loses from such a subsidy? ******PLEASE ONLY ANSWER PART B****
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Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education.
(a) Depict, with the help of a figure, the initial market for tertiary education in
Gondolin, assume that: 1) education was left to the competitive free market; 2)
the marginal private benefit is equal to the marginal social benefit; 3) the
marginal private cost is equal to the marginal
the help of the figure, the effect of the government subsidy on the price and
quantity traded of tertiary education, where the X axis of the figure should be
the quantity of students enrolled in tertiary education. You do not need to use
actual numbers – focus on the direction of change in price and quantity traded
caused by the subsidy.
(b) Identify the area of the figure you drew in (a) that depicts the total size of the
subsidy paid by the government to the students enrolled in tertiary education in
Gondolin. Who gains and who loses from such a subsidy?
******PLEASE ONLY ANSWER PART B****
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- Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. Depict, with the help of a figure, the initial market for tertiary education in Gondolin, assume that: 1) education was left to the competitive free market; 2)the marginal private benefit is equal to the marginal social benefit; 3) themarginal private cost is equal to the marginal social cost. Now describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy.The attached figure indicates the initial market for tertiary education in a country that pays a subsidy of $10 000 per year to each student enrolled in tertiary education. iI is assumed that assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Identify the area of the figure that depicts the total size of the subsidy paid by the government to the students enrolled in tertiary education. Who gains and who loses from such a subsidy?Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. Depict, with the help of a figure, the initial market for tertiary education in Gondolin, assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy.
- Most countries today have subsidised the provision of education. We will use the UK as an example country. Let’s say that the UK pays a subsidy of $10 000 per year to each student enrolled in tertiary education. a. Depict, with the help of a figure, the initial market for tertiary education in the UK, assume that: Education was left to the competitive free market The marginal private benefit is equal to the marginal social benefit The marginal private cost is equal to the marginal social cost. Now describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy. b. Identify the area of the figure you drew in (a) that depicts the total size of the subsidy paid by the government to the students…Some economists claim that early child care generates an external benefit to society. a. What is the market equilibrium? What is the socially optimal outcome? How do they differ? b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? c. How much is the total government subsidy each month to reach a socially optimal outcome?Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. ADDITIONAL INFO - DONT NEED THIS ANSWERED - Depict, with the help of a figure, the initial market for tertiary education in Gondolin, assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Now describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy. QUESTION Identify the area of the figure you drew in (a) that depicts the total size of the…
- Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education ADDITIONAL INFORMATION Depict, with the help of a figure, the initial market for tertiary education in Gondolin, assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Now describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy. (b) Identify the area of the figure you drew in (a) that depicts the total size of the subsidy paid by the government to…Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. (a) Depict, with the help of a figure, the initial market for tertiary education in Gondolin, assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Now describe, using the help of the figure, the effect of the government subsidy on the price and quantity traded of tertiary education, where the X axis of the figure should be the quantity of students enrolled in tertiary education. You do not need to use actual numbers – focus on the direction of change in price and quantity traded caused by the subsidy. Identify the area of the figure you drew in (a) that depicts the total size of the subsidy paid by the government to the students…Most countries today have subsidised the provision of education. We will use the UK as an example country. Let’s say that the UK pays a subsidy of $10 000 per year to each student enrolled in tertiary education. a. Subsidies lead to overproduction and overconsumption relative to the competitive equilibrium. What is the deadweight loss associated with this? Why is there a deadweight loss? Depict this in a figure. b. The original assumption for the UK stated that the marginal private benefit is equal to the marginal social benefit. Now instead assume that the marginal social benefit of tertiary education is greater than the marginal private benefit. That is, assume there is a positive externality associated with having a tertiary education. Draw this in a new figure. Is the deadweight loss from the subsidy increased or decreased with the introduction of the positive externality? Why?
- Most countries today have subsidised the provision of education. Consider an imaginary country, Gondolin. Gondolin pays a subsidy of $10 000 per year to each student enrolled in tertiary education. The original assumption for Gondolin stated that the marginal private benefit is equal to the marginal social benefit. Now instead assume that the marginal social benefit of tertiary education is greater than the marginal private benefit. That is, assume there is a positive externality associated with having a tertiary education. Draw this in a new figure. Is the deadweight loss from the subsidy increased or decreased with the introduction of the positive externality? Why?fourth task) Education benefits society as a whole. That is why, among other things, studies at colleges and universities are subsidized: Students pay for the semester ticket, while the state covers the cost of courses, among other things. Assume that the subsidy is paid as a fixed amount per student.4a) What is the form of market failure that economically justifies the education subsidy? Briefly justify your answer. 4b) What is the effect of the subsidy and what are its welfare effects? Assume an optimally designed subsidy and give reasons for your answer. 4c) Does it make a difference whether the subsidy is earmarked and paid directly to the students or to the respective university? Give reasons for your answer.4) Which of the following is the problem with using price and quantity controls to decrease obesity rates? A) setting a quota too low would lead to a black marketB) setting a price floor too high would lead to a black marketC) setting a price ceiling too high would be ineffectiveD) they are not be effective due to substitutabilityE) setting a price floor too low would be ineffective 7) The problem of market failure associated with imperfect information was government mandated food labels. The ineffectiveness of this solution is supported by the results of studies presented in lecture, in particular the 2011 Duke taco time study. A) True B) False 8) the application of an excise tax cause A) the MC curve to shift downward B) the MC curve to shift upward C) the MB curve to shift downward D) the MB curve to shift upward 9) In Edward Glaeser’s model of hatred, it’s important for the suppliers of hate to arrange for their audience (X) to have easy access to the hated group (Y) so that…
