Suppose each year of education a student receives provides $1000 worth of external benefits to society because students share their wisdom, support better policies, and serve as more productive workers. On the graph to the right, draw typical-looking curves for the private marginal benefit and the private marginal cost (just like the ones for beehives and airline flights among other goods in the textbook). Add the social marginal benefit curve as appropriate for this particular situation. Label the socially optimal quantity of years of education "Qs" and label the quantity that will actually be purchased (in the absence of government intervention) "Qp".
Using a specific number in your response, indicate one approach the government could take to achieve the socially optimal quantity of education.

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The Answer of Suppose each year of education a student receives provides $1000 worth of external benefits to society because students share their wisdom, support better policies, and serve as more productive workers. On the graph to the right, draw typical-looking curves for the private marginal benefit and the private marginal cost (just like the ones for beehives and airline flights among other goods in the textbook). Add the social marginal benefit curve as appropriate for this particular situation. Label the socially optimal quantity of years of education "Qs" and label the quantity that will actually be purchased (in the absence of government intervention) "Qp".
Using a specific number in your response, indicate one approach the government could take to achieve the socially optimal quantity of education.

Suppose Each Year of Education a Student Receives Provides $1000