Using the figure above, suppose a subsidy of 15,000 per student ...

[jrubin]

Using the figure above, suppose a subsidy of 15,000 per student is provided to private colleges. When the market is in equilibrium, marginal social benefit ________ marginal cost, and the number of students enrolled is ________.
 
  A) exceeds; above the efficient quantity
  B) exceeds; below the efficient quantity
  C) is below; above the efficient quantity
  D) is below; below the efficient quantity
  E) equals; efficient

Question 2

A south sea island produces only coconuts. In 2012, the price of a coconut is 1 and the quantity produced is 200. In 2013, the price of a coconut is 1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 is ________.
 
  A) 375
  B) 350
  C) 200
  D) 250
  E) 1.50

[orangecrush]

Answer to Question 1

E

Answer to Question 2

D

[jrubin]

TYSM

[shailee]

Excellent