Government’s financial contributions to higher education will benefit society as a whole and not just the individuals receiving support. Critically evaluate this statement by explaining, using a diagram and its description, whether government should intervene when a positive consumption externality occurs. Can a (Pigouvian) subsidy imposed by government promote allocative efficiency?
Pigouvian subsidy refers to the
subsidy that is used to encourage positive externality.
Positive externality enhances society as a whole.
Government’s financial contributions to higher education will
benefit society as a whole and not just the individuals receiving
support. Pigouvian subsidy imposed by government promote allocative
efficiency. If government invest more in education, it will benefit
to the whole society.
Piguvian subsidies causes increase in consumption and output to a
more socially efficient level.
Piguvian subsidy shifts the supply curve to right and it leads to a
lower market price and higher quantity demanded.
Government’s financial contributions to higher education will benefit society as a whole and not just the...
Government’s financial contributions to higher education will benefit society as a whole and not just the individuals receiving support. Critically evaluate this statement by explaining, using a diagram and its description, whether government should intervene when a positive consumption externality occurs. Can a (Pigouvian) subsidy imposed by government promote allocative efficiency?
macoroeconomics
1. Society as a whole faces opportunity costs because a. there is not enough money to go around b. politicians are greedy c. resources are scarce d. our needs are unlimited 2. Mary decides to spend 3 hours working overtime rather than watching a video with her friends. She earns $9 an hour. Her opportunity cost of working is: a. the enjoyment she would have received had she watched the video with friends. b. $27 she earns working c....
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Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...