If public subsidies for education were eliminated, what would you expect as an outcome in the market for educational services?
A) More students would enroll in school.
B) The price students pay to attend school would equal the value of an additional unit of education consumed.
C) There would be no correlation between the price students pay and the cost of providing the educational services.
D) The quality of education would deteriorate.
Answer: B
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When individuals make decisions about how much schooling to obtain, they
A) do not take account of the personal benefits that it creates. B) do not take account of the external benefits that it creates. C) overvalue the personal benefits that it creates. D) overvalue the external benefits that it creates.
If capital per-worker is rising, then ________
A) depreciation is equal to investment B) depreciation is greater than investment C) depreciation is less than investment D) depreciation is less than consumption