Most governments subsidize basic education because
A)there are external costs associated with well-educated citizens.
B)the marginal social benefit from education is greater than the marginal private benefit.
C)of the existence of private schools.
D)the marginal social cost of education is greater than the marginal private cost.
E)otherwise too many students will receive educations.

Question

Quizplus · Accepted Answer

Basic education provides benefits to society beyond just the individual receiving the education, such as a more productive workforce and lower crime rates. These external benefits make the marginal social benefit of education greater than the private benefit, which means that without government intervention, the optimal level of education would be lower than what is socially desirable. By subsidizing basic education, governments can reduce this gap between the private and social benefits, leading to a more efficient allocation of resources.

Most Governments Subsidize Basic Education Because