If consumption of education creates an external benefit, then in order to increase efficiency relative to the outcome determined by private decisions,
A) more education must be produced.
B) the same amount of education must be produced, and the price should be lower.
C) less education must be produced, and the price should be higher.
D) less education must be produced, and the price should be lower.
E) less education must be produced at the same price.

Question

Quizplus · Accepted Answer

When education creates an external benefit, it means that the social benefit is greater than the private benefit. To increase efficiency, more education should be produced to align the social benefit with the social cost.

If Consumption of Education Creates an External Benefit, Then in Order