Education is heavily subsidized through public schools and government scholarships. This subsidization of education reflects the fact that
a. a negative externality requires a subsidy to move the market equilibrium closer to the social optimum.
b. the social cost of education exceeds the private cost of education.
c. the social value of education exceeds the private value of education.
d. the market-equilibrium quantity of education exceeds the optimal quantity of education.
c
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The relationship between the marginal product of labor (MP), the product price (P), and marginal revenue product of labor (MRP) in a perfectly competitive market is
a. MP = P x MRP b. MP = MRP / P c. MRP = P + MP d. MRP = P / MP e. MP = P + MRP
The number of firms in a monopolistically competitive market means that
A) all firms will have substantial monopoly power since there are so few firms in the industry. B) each firm has a relatively small share of the total market since there are many firms in the industry. C) the firms will be likely to collude since there are only a few firms in the industry. D) firms will have a hard time earning non-negative profits since there are many firms in the industry.