Economics of Education. The issue of education is quite critical. The demand for education by society is high. On the other hand, it is demanded that the schools only charge low tuition fees since schools serve a social function. Thus, more often than not, tuition fee ceilings are imposed to assure students of lower prices for this “commodity”. Two common solutions are proposed to address the likely problem of excess demand for educational services (ES) in the event of a tuition fee ceiling is imposition: (i) operation of public schools (e.g., free public high school); (ii) government subsidy to private education. Find the solutions to the problems below: where: D = demand for educational services S = supply of educational services TF or P = tuition fee or price of education (‘000 pesos) Q = quantity of educational services expressed in ‘000 students availing themselves of such services Suppose we let: S: TF or P = 1 + 0.5 Q D: TF or P = 15 – 2Q a. Solve for the equilibrium price and quantity
Economics of Education. The issue of education is quite critical. The
On the other hand, it is demanded that the schools only charge low tuition fees since schools serve a social
function. Thus, more often than not, tuition fee ceilings are imposed to assure students of lower prices for this
“commodity”. Two common solutions are proposed to address the likely problem of excess demand for
educational services (ES) in the event of a tuition fee ceiling is imposition: (i) operation of public schools (e.g.,
free public high school); (ii) government subsidy to private education.
Find the solutions to the problems below:
where:
D = demand for educational services
S = supply of educational services
TF or P = tuition fee or
Q = quantity of educational services expressed in ‘000 students
availing themselves of such services
Suppose we let: S: TF or P = 1 + 0.5 Q
D: TF or P = 15 – 2Q
a. Solve for the
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