Binghamton ECON 343 – Describe the expected effects that college

Binghamton ECON 343 – Describe the expected effects that college

Subject: Economics    / General Economics
Question
Describe the expected effects that college scholarships based on (a) student ability and (b) student need are likely to have on the distribution of earnings. If the society’s primary concern is to narrow the earnings gap between the “rich” and “poor”, which scholarship mechanism would likely help achieving the goal? What would be the possible setbacks from this mechanism? Complement your answer with a graphical explanation using the human capital supply-demand interaction.