According to a report from the US Census Bureau, "the average lifetime earnings of a full-time year round work with a high school education is about $1.2 million, compared to about $2.1 million for a college graduate. This indicates that there is a considerable benefit to a graduate from investing in his or her own education. Tuition at most state universities covers only about 2/3- of actual costs, so the state provides a subsidy to college education. If this subsidy is appropriate, is the externality created by the college education a positive or negative externality? What does this imply about the costs and benefits to the student as opposed to the costs and benefits to society in general? What are some reasons for the differences?

According to a report from the US Census Bureau, "the average lifetime earnings of a full-time year round work with a high school education is about $1.2 million, compared to about $2.1 million for a college graduate. This indicates that there is a considerable benefit to a graduate from investing in his or her own education. Tuition at most state universities covers only about 2/3- of actual costs, so the state provides a subsidy to college education. If this subsidy is appropriate, is the externality created by the college education a positive or negative externality? What does this imply about the costs and benefits to the student as opposed to the costs and benefits to society in general? What are some reasons for the differences?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 23P: HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow...

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