The Return to Schooling for Society Is Higher Than the Return

question 65

Multiple Choice

The return to schooling for society is higher than the return to schooling for the individual if

• A)the concept of diminishing returns applies to education.
• B)the concept of constant returns to scale applies to education.
• C)human capital conveys positive externalities.
• D)investment in human capital involves no opportunity costs.

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Definitions:

Economic Profit

The profit from business activities minus both the explicit and implicit costs, including opportunity costs.

Accounting Profit

The net income of a business as calculated by subtracting total expenses from total revenues, following standard accounting principles.

Marginal Costs

The additional expense incurred from the creation of one extra unit of a product, essential in economic decision-making.

Marginal Cost Curve

A graphical representation showing the cost of producing one more unit of a good.