Cameron is a bright high school senior who is thinking about going to college. The figure illustrates
Question:
Cameron is a bright high school senior who is thinking about going to college. The figure illustrates the marginal benefits and marginal costs of going to college. Cameron's community derives benefits from Cameron's education, as illustrated by the positive externality curve above. Given this information, if the community wants Cameron to obtain the socially optimal quantity of college, they could
a. Impose a tax on Cameron to help pay for his schooling.
b. Provide a subsidy to Cameron to help pay for his schooling.
c. Impose a restriction on the number of years that Cameron can attend school.
d. Do nothing, because Cameron will choose with the socially optimal quantity of education without their intervention.
Step by Step Answer:
Introduction To Economics Social Issues And Economic Thinking
ISBN: 9780470574782
1st Edition
Authors: Wendy A. Stock