If a Positive Externality Exists in the Provision of Education

question 63

Multiple Choice

If a positive externality exists in the provision of education when education is provided in a perfectly competitive market without government intervention, at the market equilibrium level of education:

• A) additional net gains to society are possible by reducing the level of education.
• B) additional net gains to society are possible by raising the level of education.
• C) the marginal social benefit of education equals the marginal social cost.
• D) additional net gains to society are not possible by either increasing or decreasing the level of education.

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