If the government subsidizes colleges so that the efficient number of students will enroll, what is the cost to taxpayers? Use the following information to work Problems 5 to 7.

 The marginal cost of educating a college student online is $3,000 a year. Table 1 shows the marginal private benefit schedule from a college education. The marginal external benefit is 50 percent of the marginal private benefit.

Table 1

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TABLE 1 Students (millions per year) 122546 3 Marginal private benefit (dollars per student per year) 6,000 5,000 4,000 3,000 2,000 1,000