If public subsidies for education were eliminated, what would you expect as an outcome in the market for educational services?
A. The quality of education would deteriorate.
B. The price students pay to attend school would equal the value of an additional unit of education consumed.
C. More students would enroll in school.
D. There would be no correlation between the price students pay and the cost of providing the educational services.
Answer: B
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If the inflation rate is negative, the price level in an economy is
A) falling. B) rising slowly. C) constant. D) rising rapidly.
If the nominal GDP is $16.2 trillion and money supply is $1.9 trillion, then the velocity is
a. 0.12. b. 16.2. c. 8.5. d. 1.9.
The aggregate supply curve shows for each price level the
a. total amount of money supply at each price level. b. amount of frictional unemployment that will occur. c. amount of structural unemployment that will occur. d. quantity of goods and services that businesses are willing to produce.
The crowding out effect refers to a decrease in
A. Consumption or investment as a result of an increase in government borrowing. B. Consumption resulting from an increase in investment. C. Government spending resulting from a decrease in taxes. D. Investment resulting from an increase in consumption and a decrease in savings.