Which of the Following Is a Sound Economic Reason Why

question 54

Multiple Choice

Which of the following is a sound economic reason why the government should subsidize your college education?

• A) To help the school's monopoly power over private schools.
• B) It is too expensive.
• C) There are external benefits associated with education.
• D) The profit motive would cause the private sector to overproduce education.

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Definitions:

Price Elasticity

A measure of the sensitivity of quantity demanded or supplied to changes in price.

Substitutes

Pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good.

Related Diversification

Is used when a corporation believes it can achieve synergy among the various businesses that it owns.

Unrelated Diversification

Unrelated diversification is a corporate strategy involving a firm expanding into business activities that are different from its current operations or markets, aiming to reduce risk through diversification.