Question: Set up a diagram like Figure 8.6 and analyze the potential effects of the following: a. A reduction in the price of capital used to

Set up a diagram like Figure 8.6 and analyze the potential effects of the following:

a. A reduction in the price of capital used to produce schooling.

b. An increase in the price of labor used to produce schooling.

c. A state law that forces small schools to consolidate with larger school districts.

d. A state law that requires that schools have a pupil/teacher ratio of no more than 20.

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a A reduction in the price of capital used to produce schooling produces a new isocost line Isocost a that intersects the Labor axis at the same point ... View full answer

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