Suppose That Each Person in a Community Had to Pay

question 176

Multiple Choice

Suppose that each person in a community had to pay for his or her own education from kindergarten through high school.One would expect that:

• A)less education would be acquired than at present since an individual may not consider the positive external benefits of education to society.
• B)more education would be acquired than at present since an individual may not consider the positive external benefits of education to society.
• C)the optimal amount of education would be acquired by community members since they each paid for the amount of education they wanted.
• D)a Pigouvian tax would ensure the optimal amount of education.

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Definitions:

Down Payment

An initial payment made when something is bought on credit, representing a fraction of the full purchase price.

Scope of Authority

The range or limits of the powers and responsibilities legally granted to a person or organization.

Liable

Subject to being held accountable, usually in a legal or financial context, for fulfilling obligations or compensating for an incurred loss or damage.

Constructive Trust

A legal concept created by a court to rectify a situation where someone has wrongfully gained property at another's expense.