The Privately-Owned School System in Smalltown Has a Virtually Unlimited

question 198

Multiple Choice

The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from having an educated community is a public good, which of the following would not be correct?

• A)The free-rider problem causes the private market to undersupply education to the community.
• B)The government can potentially help the market reach a socially optimal level of education.
• C)A tax increase to pay for education could potentially make the community better off.
• D)The private market is the best way to supply education.

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Definitions:

Margin of Error

The maximum amount by which the sample results are expected to differ from the true population value.

Normally Distributed

Describes a distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values from the mean.

Skewed

Skewed describes a distribution that is asymmetrical, where its tail extends more on one side than the other, often used in statistical data analysis.