Q2 IQuestion 2 '15 Points We will model the Eiden administration's student debt forgiveness plan using actual numbers and making some simplifying assumptions. Around 13% of adults in the LLB. have student debt [so 32% do not receive a benefit}. To simplify, assume that all adults with student debt will have $13,501] of their debt forgive n. on average. The estimated cost of the program [including administrative costs of managing the program} is $2,300 per person. There are no externalities to consider Assume that everyone has the same utility function that depends on the net payoff of the plan {c}: Ulc]: = c. (12.1 Question la] 2 Points Assuming all adults vote. if this plan were to appear as a voter initiative in the next election would it get approved by majority vote? Save Answer Q21 Question lb} 4 Points Assume the plan is implemented. What is the total social cosb'benet? [12.3 Question 1c} 4 Points Now assume that the 32% of adults that do not have student debt have a utility function {i.e._ payoff function} of the form: U = cI-EEUD. where o is an altruism para meter measured in $ and EEIJD is the cost in taxes they pay. Adults with student debt have same utility function as before. What value does u have to take for the plan to be efficient? [12.4 Question 1d} 2 Points lfthe altruism parameter in {c} were equal to $1.001]. would the plan get approved by majority vote