Because there are positive externalities from higher education,
a. private markets will under-supply college classes.
b. private markets will over-supply college classes.
c. the government should impose a tax on college students.
d. government intervention cannot improve the market for college classes.
a
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Suppose the demand for saline solution is perfectly inelastic for contact lens wearers
If the government imposes a tax on saline solution, what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.
A usury rate is like a price ceiling
a. True b. False Indicate whether the statement is true or false
If the government cuts taxes by $200 million and simultaneously decreases government spending by $200 million, then
A. Aggregate demand will decrease by $200 million. B. Aggregate demand in the economy will remain unchanged. C. Aggregate demand will rise because the government decrease in purchases occurs so slowly. D. People will spend only part of their tax cut, so aggregate demand will eventually rise by $200 million.
Sources of market failure include
A. external costs. B. public goods. C. external benefits. D. All of the above are correct.