Question : 21) For a product with external benefits that produced in : 1238627

21) For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?

A) underproduction compared to the efficient level

B) overproduction compared to the efficient level

C) Production equals the efficient level.

D) Underproduction and overproduction are both possible depending on whether the external benefit is to consumption or production.

E) None of the above is correct.

22) If all education in the United States were provided by private, tuition-charging schools,

A) too much education would be consumed.

B) too little education would be consumed.

C) the efficient level of education would be provided.

D) the government would provide both students and schools with vouchers.

E) education would no longer have an external benefit.

23) The figure above shows the market for college education. The efficient quantity of education is

A) 0 students.

B) 4 million students.

C) 6 million students.

D) more than 6 million students.

E) more than 4 million students and less than 6 million students.

24) The figure above shows the market for college education. Left to itself without any government intervention, a competitive market would create a deadweight loss equal to

A) zero.

B) the area d.

C) the area a + c.

D) the area b + c.

E) the area b + d.

25) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the equilibrium price of private education is

A) $12,000.

B) $16,000.

C) $20,000.

D) $4,000.

E) $6,000.

26) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the equilibrium number of students being privately educated is

A) 0 students.

B) 200 students.

C) 400 students.

D) 600 students.

E) None of the above answers is correct.

27) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary 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) 0 students; 400 students

B) 400 students; 400 students

C) 400 students; 600 students

D) 600 students; 400 students

E) 600 students; 600 students

28) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the deadweight loss equals

A) 0.

B) $800,000.

C) $1,600,000.

D) more than $1,600,000.

E) more than $800,000 and less than $1,600,000.

29) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the marginal social benefit of private elementary education equaled the marginal social cost, the deadweight loss in Chicago’s private education market would equal

A) 0.

B) $800,000.

C) $1,600,000.

D) more than $1,600,000.

E) more than $800,000 and less than $1,600,000.

30) If a government action is designed to achieve efficiency, then the action must have the market produce the amount of output so that the

A) marginal private cost equals the marginal private benefit.

B) marginal social cost equals the marginal social benefit.

C) marginal external cost equals the marginal external benefit.

D) marginal private cost equals the tax.

E) marginal social benefit exceeds the marginal social cost by as much as possible.