If Empirical Tests of the Human-Capital Theory Find Conclusive Evidence

question 163

Multiple Choice

If empirical tests of the human-capital theory find conclusive evidence that education enhances productivity,then what would optimal public policy suggest

• A)The benefits of increased productivity need to be weighed against the opportunity cost of education.
• B)Compulsory schooling laws increase social well-being.
• C)Everyone should be required to finish high school.
• D)A university education should be required of all members of society.

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Definitions:

Marginal Cost

The cost for the creation of one extra unit of a product or service.

Marginal Revenue

The extra revenue obtained by selling an additional unit of a product or service.

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Marginal Cost

The supplementary expenditure arising from the creation of an additional unit of a good or service.