Exhibit 8-1
-Refer to Exhibit 8-1. Suppose that education provides spillover benefits to the community as illustrated in the diagram. Based on this information, we can say that:

Question

​Exhibit 8-1 
-Refer to Exhibit 8-1. Suppose that education provides spillover benefits to the community as illustrated in the diagram. Based on this information, we can say that:

Quizplus · Accepted Answer

The social benefit of education (the marginal benefit to the community) exceeds the private benefit (the marginal benefit to the individual). This means that the socially optimal quantity of education is greater than the market equilibrium quantity (Q₁ > Q₀), as the spillover benefits are not taken into account in the market. Therefore, choice C is the correct answer.

​Exhibit 8-1 -Refer to Exhibit 8-1. Suppose That Education Provides Spillover Benefits

Exhibit 8-1 -Refer to Exhibit 8-1. Suppose That Education Provides Spillover Benefits