Education yields positive externalities. For example,
a. colleges and universities have benefited, in recent years, from increases in tuition paid by students.
b. as a result of earning a college degree, a person becomes a more productive worker and benefits by earning higher wager
c.a more educated population tends to result in lower crime rates.
d. All of the above are correct.
The correct answer and explanation is :
The correct answer is c. a more educated population tends to result in lower crime rates.
Explanation:
Education is often considered a positive externality because it can have widespread benefits that extend beyond the individual receiving the education. In economic terms, an externality is an effect of a decision that impacts others who did not choose to be involved. When it comes to education, positive externalities are those benefits that accrue to society as a whole, rather than just the individual who receives the education.
Let’s look at the options:
- a. Colleges and universities have benefited, in recent years, from increases in tuition paid by students.
- This statement is incorrect in the context of positive externalities because it focuses on the financial benefit to the institutions, which is a private benefit rather than an externality. The increase in tuition payments by students doesn’t generate societal benefits in the same way education as a whole might.
- b. As a result of earning a college degree, a person becomes a more productive worker and benefits by earning higher wages.
- This is a private benefit to the individual. While higher wages and increased productivity are personal advantages for the person with a college degree, this option does not describe a positive externality, as it doesn’t show how others benefit from the individual’s education. It’s important to distinguish between private and external benefits.
- c. A more educated population tends to result in lower crime rates.
- This is a true example of a positive externality. Education can help reduce crime by providing individuals with better employment opportunities and by fostering social values that discourage criminal behavior. A more educated population contributes to social stability and overall safety, which benefits society at large.
Thus, option c highlights how education can lead to positive externalities that improve the broader community, making it the correct choice.