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  3. consider the market for post-secondary education.

Consider the market for post-secondary education. The demand curve in the market is given by...

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Accounting

Consider the market for post-secondary education. The demand curve in the market is given by Q=100-P and the supply curve is given by Q=P/4, where Q is the number of students. Education creates a positive externality such that marginal external benefit increases with the number of students according to the function MEB=Q. Now suppose government provides an ad valorem (%) Pigouvian subsidy to producers in this market.

30. The ad valorem subsidy rate is ___________%.

31. Gain in consumer surplus (CS) is $ ____________.

32. Gain in producer surplus (PS) is $ _____________.

33. Increase in third part (external) effects (EE) is $ ______________.

34. Government subsidy payments (GB) total $ ________________.

35. The increase in total benefits (TB) are $ _________________.

36. The increase in total costs (TC) are $ ________________.

37. The gain in net social welfare (NSW) is $________________.

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