Most governments subsidize basic education because
A) there are external costs associated with well educated citizens.
B) the marginal social benefit of education is greater than the marginal private benefit.
C) of the existence of private schools.
D) None of the above answers are correct.

Question

Quizplus · Accepted Answer

Basic education provides benefits not only to the individual receiving it, but also to society as a whole. This is known as an external benefit or positive externality. Citizens who are well-educated are more likely to be employed, earn higher wages, and contribute to economic growth. Additionally, they are more likely to be informed and engaged citizens, which can lead to better governance and social outcomes. Because of these external benefits, the marginal social benefit of education is greater than the marginal private benefit, meaning that society as a whole benefits more from education than the individual receiving it. This justifies government subsidies to ensure that basic education is accessible to all. The other options are not correct as private schools are not the main reason for government subsidies and there are no external costs associated with well-educated citizens.

Most Governments Subsidize Basic Education Because