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  • Percentage change, Maximum prices, Merit Goods, Positive Externalities 

Click to read the article below and then answer the questions:

UK graduates to pay more as repayment threshold on loans lowered

  • Calculate the percentage decrease in the salary threshold for repayment of student  loans from £27,295 to £25,000 

  • The cap on tuition fees represents a maximum price. Draw a diagram to show how a maximum price works

  • Higher education is a merit good. Evaluate whether the market will be more prone to failure as graduates are asked to pay more

John Greenwood, Bromley High School for Girls 

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