Multiple Choice
Use the following figure to answer the questions : Figure : 5-5 shows a family's preferences toward schooling,before and after a fixed-quantity subsidy.
-Prior to the subsidy,the family is in equilibrium at point J.Assume that public schooling cannot be supplemented with private tutoring.Refer to Figure 5-5.After the fixed-quantity subsidy has been introduced,the family consumes:
A) its optimum level of other goods.
B) less than its optimum quantity of schooling.
C) more than its optimum quantity of schooling.
D) less than its optimum quantity of other goods.
Correct Answer:

Verified
Correct Answer:
Verified
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