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Assume that primary education has a beneficial externality. Choose one if the government does not fund education. The ideal amount of schooling is at the equilibrium.

The quantity of education at equilibrium will be lower than the quantity of education that is best for society. The amount of education that is socially desirable will be the same as the equilibrium amount of education. The amount of education at equilibrium will be higher than the amount of education that is best for society. Let's say that receiving an elementary education has a beneficial externality. If the government does not subsidize education, it can still encourage positive externalities by subsidizing products or services that result in positive spillover effects. A payment made by the government that effectively decreases the cost of producing a specific commodity or service is known as a subsidy. such grants

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