Question 31 pts The private marginal benefit a person derives from a year of edu

Question

Question 31 pts The private marginal benefit a person derives from a year of education is given by PMB = 110 – 6Q, where Q is the number of years spent in school. The private marginal cost per year of education is given by PMC = 20. There is a positive consumption externality of $18 per year of school attended. Which of the following statements is true?

The market equilibrium is efficient.

In the market equilibrium everyone gets 15 years of education.

In the market equilibrium everyone gets 18 years of education.

In the socially efficient equilibrium everyone gets 15 years of education.

a and b are true.

Explanation / Answer

Ans

Right answer is in the market equilbrium everyone gets 15 years of schooling. This is because for equilbrium mc =mb

110-6Q=20

Q=90/6=15

100% right answer Please like answer

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