Reference no: EM13245673
The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per year of education. Each year of education has a marginal external benefit to society equal to $8,000. Assume that the marginal social cost is the same as the marginal cost paid by an individual student.
Qty. Of Education (yrs)|Sian's Marginal Bene. Per Yr.|Sian's Margin. Cost Year
9
$20,000 ...........................| $15,000
10
19,000 .............................| 16,000
11
18,000 ..............................| 17,000
12
17,000 ..............................| 18,000
13
16,000 ..............................| 19,000
14
15,000 ..............................| 20,000
15
14,000 ..............................| 21,000
16
13,000 ..............................| 22,000
17
A. Find Sian's market equilibrium number of years of education.
B. Calculate the marginal social benefit schedule:
Yrs of Edu.|ben. ea/yr|extern.ben. to society|social ben.|cost per yr
9 ...........| ---------- | --------------------------- | ----------- | ---------
10 ......... | $20,000...| ......$8,000 .............| ---------- | $15,000
11 ......... | 19,000....| ....... 8,000 ............ | ----------- | 16,000
12 ......... | 18,000....| ....... 8,000 ............ | ----------- | 17,000
13 ......... | 17,000....| ....... 8,000 ............ | ----------- | 18,000
14 ......... | 16,000....| ....... 8,000 ............ | ----------- | 19,000
15 ......... | 15,000....| ....... 8,000 ............ | ----------- | 20,000
16 ......... | 14,000....| ....... 8,000 ............ | ----------- | 21,000
17 ......... | 13,000....| ....... 8,000 ............ | ----------- | 22,000
What is the socially optimal number of years of education?
C.You are in charge of education funding. Would you use a Pigouvian tax or a Pigouvian subsidy to induce Sian to choose the socially optimal amount of education?
D.How high would you set this tax or subsidy per year of education?
The law of comparative advantage recommends that countries
: The law of comparative advantage recommends that countries specialize in those products in which they have a comparative advantage, not an absolute advantage.
|
Determine the angular velocity of the earth
: Assume the Earth is in uniform cicular motion about the sun. Explain how to determine the angular velocity of the Earth
|
Interpret the coefficients of each explanatory variable
: Analysts at the Fleetfeet Corporation estimate a demand function for its athletic shoe line to be: Qf = 5 - 2.4*Pf + 0.7*A + 0.002*I + 0.8*Ps Where Qf = the quantity of shoes sold, Pf = the own price of shoes produced by Fleetfeet ($/pair)
|
How banks are financial intermediaries
: Explain how banks are financial intermediaries. What are reserves? What are excess reserves? Explain how the Fed can affect the quantity of excess reserves in the banking system
|
What is the socially optimal number of years of education
: The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per year of education. Each year of education has a marginal external benefit to society equal to $8,000.
|
Who can produce any linear combination of chickens
: Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes
|
What is the mass of the unknown element
: A sample containing beryllium (atomic mass 9 u), aluminum (27 u), and an unknown element is placed in a mass spectrometer, What is the mass of the unknown element
|
What is the marginal revenue at the price computed in part
: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firm- Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as..
|
What advice would give to friend under the circumstances
: In the following year, your friend asks for your help again. All of the data remain the same; however your friend finds that she is no longer profitable in the spring, summer, or fall months. What advice would you give to her under these circumsta..
|