The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then the private market outcome is inefficient because
A) no students will go to college.
B) society places less value on educating the next student than it will cost society to educate that student.
C) society places greater value on educating the next student than it will cost society to educate that student.
D) the marginal cost will shift upward.
C
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When factors of production are not fixed (as in the long run) and labor immigrates, capital will:
a. remain fixed because capital is never mobile. b. increase in the capitalintensive industry. c. move to the higher productivity use in the labor intensive industry until returns are again equalized. d. become idled as owners of capital seek more profitable opportunities.
Keynes believed that an important source of instability in the economy was instability
a. of private investment demand. b. in the marginal propensity to consume (b). c. of expectations. d. in tax collections. e. Both a and c