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:

Justice and Fairness

Concepts concerning moral rightness based on ethics, law, rationality, equity, and fairness in social, legal, and economic systems.

Trust

Confidence in or reliance on some quality or attribute of a person or thing, or the truth of a statement.

Leader

An individual who influences and guides others towards achieving a common goal, often possessing qualities such as charisma, vision, and the ability to motivate.

Coercive Behaviour

The use of force or intimidation to influence someone's actions or decisions.