Full Answer Section

The external benefits of education are generally considered to be large. This is because education has a positive impact on many different aspects of society, not just the individual who receives it.

The government can promote the efficient provision of products that have external benefits by providing subsidies or tax breaks. Subsidies are payments made by the government to producers of a good or service, while tax breaks are reductions in the amount of taxes that producers have to pay.

If the government decides to put more resources into education, there are a number of opportunity costs that need to be considered. These include the cost of the resources that would be used for other purposes, such as healthcare or infrastructure.

An economist would determine the right amount of government support for education by considering the following factors:

• The size of the external benefits of education
• The cost of providing education
• The preferences of the people who would be affected by the government’s decision

In conclusion, education is a public good with large external benefits. The government can promote the efficient provision of education by providing subsidies or tax breaks. The opportunity costs of increasing government spending on education need to be considered. The right amount of government support for education is a complex issue that depends on a number of factors.