Suppose that a college education creates positive externalities. Use the following graph which represents the market for a college education in the land of Smartypants to answer the questions that follow. MSB stands for marginal social benefit, MPB stands for marginal private benefit, and MPC stands for marginal private cost:

a. How many students will attend college under laissez-faire? How much will each pay in tuition?

b. Is college attendance under laissez-faire higher or lower than is socially optimal?

c. Should the government of Smartypants tax or subsidize college education? How much should they tax or subsidize it per student?