Author Question: In developing countries higher educational facilities have tended to expand to the point where ... (Read 90 times)

notis · **on:** Jun 30, 2018

In developing countries higher educational facilities have tended to expand to the point where social benefits exceed private benefits. What is the economic explanation for this?

What will be an ideal response?

Question 2

In economic language, children may sometimes be considered an inferior good. What does that mean and why might it be true?

What will be an ideal response?

cloud · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Supply and demand are not equated by a price adjusting market mechanism, but rather institutionally, through the state. Those with political influence seek to create subsidized education for their children.

Answer to Question 2

An inferior good is one for which smaller quantities are demanded at higher levels of income. The discussion should be framed in terms of greater opportunity cost of children when incomes rise and the substitution of quality of children (better health, education) for quantity.