Because there are positive externalities from higher education,
A) private markets would provide too little of it.
B) private markets would provide too much of it.
C) the government should impose a tax on university students.
D) the government should impose a tax on students' families.

Question

Quizplus · Accepted Answer

Positive externalities imply that there are external benefits to society that are not being taken into account by individuals when making their decisions about how much education to pursue. Private markets tend to focus on individual benefits and costs, rather than externalities, which means that they may not provide enough education to satisfy social demand. Therefore, the government may need to intervene to ensure that education levels are optimal from a social perspective.

Because There Are Positive Externalities from Higher Education