Direct Marketing Education
How can correct market failures caused by under-consumption of education?
It is quite clear that education is a well deserve underconsumed (below the socially efficient level), due to positive externalities. So how can the government go about correcting this deficiency of the market and direct delivery and giving subsidies? I need one more choice, but I can not think of anything so I've been stuck for hours! : / If subsidies the best way to achieve allocative efficiency?
Most governments believe that education is extremely important and is a positive externality. Therefore, it is right that the government would try to resolve the issue of welfare of society is not making the maximum for external marginal benefit (SEM) through a grant equal to SEM. They could also intervene and provide for the good, through the creation of public schools and such. As an alternative, the government would conduct an interventionist measure, for example, altered government policies and laws. For example, in Singapore, the government made mandatory education for all citizens. Grants may or may not be the best way to achieve allocative efficiency, - may be due to directly address the issue of the SEM - Can not be because it is difficult to predict the right amount of the subsidy granted in order to achieve the socially optimal level of consumption, and the wrong amount grant awarded can even make resource allocation worst (it must be noted on the MEB / MSB / MPB diagram to know what this means) I hope this helped:)
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