If education produces positive externalities, we would expect
A)the government to tax education.
B)the government to subsidize education.
C)people to realize the benefits, which would increase the demand for education.
D)colleges to relax admission requirements.

Question

Quizplus · Accepted Answer

Positive externalities occur when the benefits of a good or service spill over to society as a whole, rather than just to the individual consumer. Education is considered to produce positive externalities because the educated individual not only benefits themselves, but also contributes to society through increased productivity, civic engagement, and innovation. Since private individuals may underinvest in education due to the inability to capture all of its benefits, the government may choose to subsidize education to encourage more people to pursue it.

If Education Produces Positive Externalities, We Would Expect