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:

Specific Phobias

A type of anxiety disorder characterized by an excessive and irrational fear of specific objects, situations, or creatures.

Panic Disorder

A type of anxiety disorder characterized by sudden episodes of intense fear that trigger severe physical reactions without any real danger or apparent cause.

Panic Attacks

Periodic, short bouts of panic that occur suddenly, reach a peak within minutes, and gradually pass.

Dysfunctional Behavior

Actions or behaviors that are disruptive or detrimental to the individual's daily life and functioning.