Asked by Jameka Hicks on Jun 11, 2024
Verified
Education generates external benefits. When these external benefits are not considered, the market will produce
A) an efficient level of education.
B) more than the efficient level of education.
C) less than the efficient level of education.
D) zero units of education.
External Benefits
Benefits derived from a product or service that affect parties who did not choose to incur that benefit.
Efficient Level
The optimal point of operation where resources are used in such a way that maximizes productivity and minimizes waste.
- Distinguish the separation between positive and negative externalities and their impact on the welfare of society.
- Explain the influence of externalities on the inefficient assignment of resources when there is no intervention from the government.
Verified Answer
JO
Jaden OteroJun 12, 2024
Final Answer :
C
Explanation :
External benefits of education, such as increased productivity and lower crime rates, are not fully captured by the market, leading to underinvestment in education compared to the socially optimal level.
Learning Objectives
- Distinguish the separation between positive and negative externalities and their impact on the welfare of society.
- Explain the influence of externalities on the inefficient assignment of resources when there is no intervention from the government.