If the benefits to society of students attending college exceed benefits to the students,
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)in time, no higher education will be produced

Question

Quizplus · Accepted Answer

A positive externality exists when the benefits of a good or service spill over to others who are not necessarily paying for it. Higher education provides a positive externality because the benefits extend beyond the individual student to society as a whole. For example, a more educated workforce can lead to technological advances and economic growth. Therefore, it may be necessary for the government to subsidize higher education or encourage more people to attend college through policies such as financial aid.

If the Benefits to Society of Students Attending College Exceed