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Consider the market for education. The marginal social cost of education (MSC) and the marginal private benefit of education (MPB) are given by the following equations where Q is the number of units of education provided per year. MSC = 10 + Q
MPB = 100 – Q
You are also told that each unit of education provides an external benefit to society of $10 per unit. This external benefit is currently not being internalized in the market
e) Suppose that the external benefit is internalized in this market when the government provides a subsidy of $10 per educational unit to consumers. What will be the socially optimal amount of education to provide given this subsidy?
f) Given the subsidy in (e), calculate the value of consumer surplus with the subsidy (CS’), producer surplus with the subsidy (PS’). With the subsidy there are no longer any external benefits that the market fails to account for. Sum together CS’ + PS’:
q.suppose a firms production function is q2kl2-l3and its quantity of capital is fixed at k6 in the short-run.a. find
Widgetland has 60 workers. Each worker can produce 10 widget(s) or 12 wadget(s). Each resident in Widgetland currently consumes 8 widget(s) and 8 wadget(s). Wadgetland also has 60 workers. Each can produce 10 widget(s) or 8 wadget(s). To maximize con..
Identify also converse at least two arguments which support trade restrictions also two Once modest trade restrictions.
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q.assume that in 1998 the following prevails in the republic of nurd y200 g0 c160 t0 s40 iplanned30assume that
When a firm pursues a predatory pricing strategy, it does so
What are the various ways in which the Federal Reserve influences the economy? What important tools do they use in influencing the commercial banking system?
q1. when crude oil price controls were in place illustrate what would have been the welfare implications of a ban on
Office building maintenance plans call for the stripping, waxing, and buffing of ceramic floor tiles. This work is contracted out to maintenance firms, and both technology and labor requirements are very basic.
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