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Education is often identified as a club good whiclh is defined as a good or service that is non-rival in consumption but is excludable. Assuming you agree with this description, provide answers to the following 1. What would be the likely outcome if government decided to stop providing education and closed al public schools? 2. How could the government get out of the education business but still affect the number of students attending school?
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Answer #1

1.

Education will remain as a club good, but no. Of schools supplied, will decrease and price of education will increase. So, families will be discouraged to send their kind to the private schools. Hence, degree of excludability, will increase.

2.

Government can give susbsidies to the schools in charging fees. It will make private schools to office education at lower fee and supply will increase to the right. It will again increase the demand for school education. In this way, government can intervene.

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