Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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How does education, as an area of government spending, both positively and negatively impact a business?
Is education a public good? Does education have external benefits? If so, what are some of those public benefits? In your opinion are the external benefits large or small? Why?
What should government do to promote the efficient provision of products that have external benefits? If you think that government should put more resources into education, what might be some of the opportunity costs of that decision? How would an economist determine the right amount of government support for education?
Explain why economists might say that the market for higher education demonstrates externalities and market failure.
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- If education has private benefits to an individualas well as external benefits to society, explain whya less-than-optimal amount of education occurs.arrow_forwardAs it relates to a public good, nonrivalry means that: the public sector is able to provide the good profitably. there is no need or demand for the good. either the public sector or the public sector can produce the good, but not both. one person's benefit from the good does not reduce the benefit available to others.arrow_forwardExplain why economists might say that the market for higher education demonstrates externalities and market fairlure.arrow_forward
- What is the importance of equitable in the financing of public education?arrow_forwardIn the presence of market failure ,the argument for government intervention is only compelling but not always beneficial. True or false, and explainarrow_forwardWhat is a market-failure rationale for the government investing in education and training programs? a. Education likelyresults in a negative externality in production, so government investment corrects for the under-provision by private, unregulated markets. b. Education likely results in a positive externality in consumption, so government investment corrects for the under-provision by private, unregulated markets. c. Education likely results in a positive externality in production, so government investment corrects for the over-provision by private, unregulated markets. d. Education likely results in a negative externality in consumption, so government investment corrects for the over-provision by private, unregulated markets.arrow_forward
- Why might redistribution across communities make sense for the provision of education? a-there are no spillover effects associated with education. b-everyone values education. c-there are externalities associated with education. d-there are high tax/benefit linkages associated with education.arrow_forwardThere are never unintended consequences of government intervention to address market failures. true or falsearrow_forwardKnowledge creates positive externality; therefore, governments should intervene in the education sector. What is the intervention action of governments for efficiency to gain from external benefits? Please explain each of these interventions with a clear example for each.arrow_forward
- Why are broad social indicators rarely used as measures of public program performance?arrow_forwardEducation provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.arrow_forwardHow do government failures provide rationale and justification for public policy?arrow_forward
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