The fact that positive externalities may exist in education is not enough to justify government involvement. To justify government involvement, it must be shown that _____.
a. the effect of the externalities are large
b. the externalities are inframarginal
c. people do not internalize the externalities
d. education is an investment good
Question 2
The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computers after technological advances in making computers occur?
A) Graph A
B) Graph B
C) Graph C
D) Graph D
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