Secondary education versus a post-secondary education

Reference no: EM13183761

primary education is provided by private sector and private demand is perfectly elastic (a horizontal line) at a a price of $1000/student. Assume marginal external benefit is constant at $100/student. #of students marginal private cost
1 $100
2 $ 220
3 $370
4 $ 560
5 $ 780
6 $1080
7 $ 1500
8 $1990
9 $2600
10 $3420
(a) Graphically show & state of students that will be educated if external benefits are not accounted for. Explain
(b) Graphically show & state numbers of students that should be educated in order to maximize social welfare. Explain.
(c) Devise a government subsidy that will induce private education providers to educate socially optimal number of students. Explain. Provide a $ amount for the subsidy.
(d) Does it ever make sense to not educate some students. If the example were couched in terms of college education would it ever make sense not to educate some students? Explain. Distinguish between primary and secondary education versus a post-secondary education.

Reference no: EM13183761

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