Consider the graph illustrating the supply, the demand, and the marginal social benefit (MSB) curves for one year of a universitye education. MSB Assume that the leader of the country passes a Pigouvian subsidy for university students in an attempt to get more people to obtain a secondary education. According to the graph, what is the value of this subsidy per student? Demand Supply E = market equilibrium; 0 = social optimum. 17809.14+ 11223.12+ Value of the subsidy per student: $ 11223.12 5604.84- After the subsidy passes, what is the new price for a year of Quantity of students (millions) tuition to a student? New price: $ 17809.14 The Pigouvian subsidy given is an example of a negative network externality. an industrial policy. a negative externality. a technology spillover. Total cost per student ($ per year), marginal social benefit

Consider the graph illustrating the supply, the demand, and the marginal social benefit (MSB) curves for one year of a universitye education. MSB Assume that the leader of the country passes a Pigouvian subsidy for university students in an attempt to get more people to obtain a secondary education. According to the graph, what is the value of this subsidy per student? Demand Supply E = market equilibrium; 0 = social optimum. 17809.14+ 11223.12+ Value of the subsidy per student: $ 11223.12 5604.84- After the subsidy passes, what is the new price for a year of Quantity of students (millions) tuition to a student? New price: $ 17809.14 The Pigouvian subsidy given is an example of a negative network externality. an industrial policy. a negative externality. a technology spillover. Total cost per student ($ per year), marginal social benefit

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.8P

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