How does a subsidy for education address externalities?  A. It discourages education  B. It promotes negative externalities  C. It encourages positive externalities  D. It has no impact on externalities

Suppose the government wants to increase the demand for education. Which of the following will hinder this goal?Increasing subsidies for education.Increasing access to credit for education.Increasing availability of public education.Increasing taxes on imported books.

Which of the following is a positive externality associated with education? Group of answer choicesImproved health outcomes in societyLower unemploymentIncreased income equalityAll of the above

Which of the following is true of a negative externality?Group of answer choicesThe government can use subsidies to encourage firms to internalize the externality.The government must take over the production of this good so that the externality can be internalized.Some benefits accrue to a third party.Its existence always requires corrective measures by the government.Some costs are borne by a third party.

When externalities exist _____.Multiple choice question.outside intervention may be able to improve the market outcome increasing efficiency and economic surplusefficiency and economic surplus are sometimes affected but not alwaysoutside intervention increases efficiency but not economic surplusoutside intervention usually decreases efficiency and economic surplus

8 In the market for education, market failure occurs because positive externalitieshave not been considered. Explain, with the help of a diagram, how governmentcan assess the level of overproduction or underproduction that has resultedfrom this market failure. (9 marks)