In the above figure, what amount of subsidy per student would ...

[bobthebuilder]

In the above figure, what amount of subsidy per student would government have to provide to colleges if its desired objective was to achieve an efficient level of education, 50 million students per year?
 
  A) 6,000 per year
  B) 12,000 per year
  C) 18,000 per year
  D) 27,000 per year

Question 2

During October and November 2008, gasoline prices were falling dramatically, making travel by car less expensive but air travel prices were as high as ever. What is TRUE about consumer preferences, possibilities, or choices?
 
  A) The relative price of air travel in terms of travelling by car decreases.
  B) If travelling by car is a normal good, both the substitution and income effects would lead to a decrease in travelling by car.
  C) The consumers' budget line would shift outward and its slope would not change.
  D) If air travel is a normal good, both the substitution and income effects would lead to an increase in air travel.

[angrybirds13579]

Answer to Question 1

C

Answer to Question 2

A

[bobthebuilder]

Excellent

[JaynaD87]

Gracias!