For a Product with External Benefits That Is Produced in a Competitive,
For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?
A) Underproduction and overproduction are both possible depending on whether the external benefit is to consumption or production.
B) There is overproduction compared to the efficient level.
C) Production equals the efficient level.
D) There is underproduction compared to the efficient level.
E) None of the above is correct.
The figure above shows the market for university education. The efficient quantity of education is
A) more than 4 million students and less than 6 million students.
B) more than 6 million students.
C) zero students.
D) 6 million students.
E) 4 million students.
The figure above shows the market for university education. Left to itself without any government intervention, a competitive market would create a deadweight loss equal to
A) the area d.
B) the area b + c.
C) the area a + c.
E) the area b + d.
The figure above shows the market for private school education in Adelaide. There is no external cost of private education. If the government does not intervene in this market, the equilibrium number of students being privately educated is ________ and the efficient quantity is ________.
A) 600 students; 600 students
B) 0 students; 400 students
C) 400 students; 400 students
D) 400 students; 600 students
E) 600 students; 400 students