1.  

   
   

The marginal private benefit (demand) and marginal private cost (supply) of education in China are described by: (2) Calculate the market equilibrium quantity and price of education. b. Sketch the marginal private benefit and marginal private cost diagram and indicate the result in part (a). Correctly label the diagram. C. P= 100 -0.1Q P = 10+ 0.1Q An economist has estimated that consumption of education generates a positive externality of $10 a unit. Calculate the social optimum and the deadweight loss. Indicate your results on the diagram in part (b). Show all steps in your calculation. d. What policy could the government implement to improve the market outcome? Briefly explain how your policy would impact the market. RICO