Use the figure below to answer the following question. Price and cost thousands of dollars per student 25 -MSC-MC MB "MB = D. 5 10 15 20 25 Quantity (millions of students per year) Figure 7 34) Refer to Figure 7. The figure shows the marginal private benefit and marginal social cost of a university education. If society's external benefit from university graduates is $10,000 each, then (A) a subsidy of $10,000 per student paid to the universities achieves efficiency. B) a tax of S10,000 per student imposed on the universities achieves efficiency C) a subsidy of $20,000 per student paid to the universities achieves efficiency. D) 10 million students per year is the efficient number students. E) none of the above answers are correct.

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Deanna HettingerLv2

11 Sep 2018

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The marginal cost of educating a college student is $5,000.00 a year. The table

below shows the marginal private benefit schedule from a college education. The

marginal external benefit for college education is $2,000.00 per student per year.

Students Marginal Private Benefit

(millions per year) (dollars per student per year)

1 5,000

2 3,000

3 2,000

4 1,500

5 1,200

6 1,000

7 800

8 500

a. With no public colleges and no government involvement in college

education, how many students will enroll and what is the tuition?

b. If the government subsidizes private colleges and sets the subsidy so that

the efficient number of students will enroll in college, what is the subsidy

per student? How many students will enroll?

Education is an example of a positive externality: acquiring moreeducation benefits the individual student and having a more highlyeducated work force is good for the economy as a whole.

The accompanying table illustrates the marginal benefit to Sian peryear of education and the marginal cost per year of education. Eachyear of education has a marginal external benefit to society equalto $8,000. Assume that the marginal social cost is the same as themarginal cost paid by an individual student.

a. Find Sian's market equilibrium number of years of education

b. Calculate the marginal social benefit schedule

Years of Education Sian's marginal benefit per year Marginalexternal benefit to society Marginal social benefit Sian's marginalcost per year

10 $20,000 $8,000 $15,000
11 19,000 8,000 16,000
12 18,000 8,000 17,000
13 17,000 8,000 18,000
14 16,000 8,000 19,000
15 15,000 8,000 20,000
16 14,000 8,000 21,000
17 13,000 8,000 22,000

What is the socially optimal number of years of education?

c. You are in charge of education funding. Would you use aPigouvian tax or a Pigouvian subsidy to induce Sian to choose thesocially optimal amount of education?

d. How high would you set this tax or subsidy per year of education?

orangeimpala409

Grade inflation Gone Wild - sTUarTrojsTaCzer

A bout six years ago, I was sitting in the student union of a small liberal arts college when I saw a graph on the cover of the student newspaper that showed the history of grades given at that institution in the past 30 years.

Grades were up. Way up.

I am a scientist by training and I love numbers. So when I looked at that graph, I wondered, How many colleges and universities have
data like this that I can find? The answer is that a lot of schools have data like this hidden somewhere. Back then, I found more than 80 colleges and universities with data on grades, mostly by poking around the Web. Then I created a website (gradeinflation.com) so that others could find this data. I learned that grades started to shoot up nationwide in the 1960s, levelled off in the 1970s, and then started rising again in the 1980s. Private schools had much higher grades than public schools, but virtually everyone was experiencing grade inflation.

What about today?

Grades continue to go up regardless of the quality of education. At a time when many are raising questions about the quality of U.S. higher education, the average GPA at public schools is 3.0, with many flagship state schools having average GPAs higher than 3.2. At a private college, the average is now 3.3. At some schools, it tops 3.5 and even 3.6. A is average at those schools! At elite Brown University, two-thirds of all letter grades given are now A's.

These changes in grading have had a profound influence on college life and learning. When students walk into a classroom knowing that they can go through the motions and get a B+ or better, that's what they tend to do, give minimal effort. Our college classrooms are filled with students who do not prepare for class. Many studies less than 10 hours a week that's less than half the hours they spent studying 40 years ago. Paradoxically, students are spending more and more money on an education that seems to deliver less and less content.
With so few hours filled with learning, boredom sets in and students have to find something to pass the time. Instead of learning, they drink. A recent survey of more than 30,000 first-year students across the country showed that nearly half were spending more hours drinking than they were studying. If we continue along this path, well end up with a generation of poorly educated college graduates who have used their four years principally to develop an addiction to alcohol.

Many say that grade inflation is a complicated issue with no easy fix. But there are solutions. At about the same time that I started to collect data on rising grades, Princeton University began to do something about its grade-inflation problem. Its guidelines have the effect of now limiting A's on average to 35 per cent of students in a class. Those guidelines have worked. Grades are going back down at Princeton and academic rigour is making a comeback. A similar successful effort has taken place at Wellesley College in Massachusetts. And through a concerted effort on the part of faculty and leadership, grades at Reed College in Oregon have stayed essentially constant for 20 years.

Princeton, Wellesley, and Reed provide evidence that the effort to keep grade inflation in check is not impossible. This effort takes two major steps. First, school officials must admit that there is a problem. Then they must implement policies or guidelines that truly restore excellence.

I asked Dean Nancy Malkiel at Princeton why so few schools seem to be following Princeton's lead. Because its hard work, she answered. Because you have to persuade the faculty that its important to do the work.

Making a switch will take hard work, but the effort is worthwhile. The alternative is a student body that barely studies and drinks out of boredom. That's not acceptable. Colleges and universities must roll up their sleeves, bring down inflated grades, and encourage real learning. It's not an impossible task. There are successful examples that can be followed. I am looking forward to the day when we can return to being proud of the education that our nation's colleges and universities provide.

Analyze Stuart Rojstaczer's argument in Grade Inflation Gone Wild, addressing the following questions:
What evidence does Rojstaczer use to indicate that there is a problem?
How would you characterize this evidence (for example, scientific, anecdotal), and to what extent are you persuaded by the evidence he provides to suggest that grade inflation has a profound effect on life and learning?
To what extent does he persuade you that a change in policy is
necessary or that such a change would make a difference?