need help thank you Refer to Figure 5-B. Suppose that education provides spillov

Question

need help thank you

Refer to Figure 5-B. Suppose that education provides spillover benefits to the community as illustrated in the diagram. Based on this information, we can say that: the socially optimal quantity of education is Q1 units. the socially optimal quantity of education is Q0 units. education is overproduced by Q1 minus Q0 units. the market would fall short of the desirable level of education, Q0. Refer to Figure 5-B. The area bounded by what letters represents the associated efficiency loss resulting when there are external benefits associated with education? Q0, c, b, Q1 O, P1, b, Q1 O, P0, a, Q0 a, b, c

Explanation / Answer

63 A.The socially optimal quantity of education is Q1 units

The socially optimal quantity of education is Q1 units because it is at this quantity that demand curve D1( marginal social benefit of education) is equal to the marginal social cost(supply curve S)

64.D. a,b,c

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