Education might lead to someone coming up with an improved method of producing some particular good that is then taken up by all producers of that good. This is an example of
A) productivity.
B) a patent.
C) a positive externality.
D) the brain drain.

Question

Quizplus · Accepted Answer

This situation is an example of a positive externality, where the education of one individual leads to benefits for others in the form of improved production methods. This type of externality is not captured by the market and can therefore result in underinvestment in education.

Education Might Lead to Someone Coming Up with an Improved