If the benefits to society of students attending college exceed the benefits to the students,then _____
A)higher education should be strictly regulated.
B)higher education should be taxed.
C)higher education provides a positive externality.
D)higher education is overproduced at the privately determined equilibrium.
E)higher education provides a negative externality.

Question

Quizplus · Accepted Answer

A positive externality occurs when the consumption or production of a good or service by one person or entity benefits others who are not directly involved in the transaction. Higher education provides a positive externality because the benefits extend beyond the individual student to society as a whole in the form of a more educated and skilled workforce and improved economic growth. As a result, government intervention, such as subsidizing college education, can help correct for the market failure of underinvestment in education.

If the Benefits to Society of Students Attending College Exceed