Figure 18P-3 shows supply and demand for first-aid training, based on private costs and benefits.

a. Suppose that the external benefit from first-aid training is worth $6. Graph the social benefit curve for first-aid training that accounts for the external benefit.

b. Ignoring the social benefits of training, how many hours of first-aid training will occur?

c. What is the socially optimal quantity of first-aid training?

d. What is the deadweight loss to society when consumers are unable to capture the $6 external benefit they provide from first-aid training? Graph the deadweight loss.

Figure 18P-3:

Transcribed Image Text:

Price (S) 30 28 26 24 22 20 18 16 14 12 10 6 8 10 12 14 16 18 20 22 24 2 4 Hours of first-aid training