财政学课本习题答案（第8版）Chapter_07.docVIP

Chapter 7 – Education 1. There are numerous rationales given for government provision of education. Even though education is primarily a private good, many argue that educating a child provides external benefits. However, the existence of a positive externality implies that government should subsidize education rather than making it free and mandatory. Other rationales are based on equity, including a belief in commodity egalitarianism. 2. If households are allowed to supplement public education with private lessons, then the budget constraint in Figure 4.5 of the textbook is modified by drawing a line starting at point x (consuming only public education) that runs to the southeast and is parallel to AB. The figure below is then similar to the analysis of in-kind benefits like food stamps. If parents pay for the public schooling (rather than perceiving it as being free), and the schooling was paid for with a lump sum tax, then the budget constraint shifts in by an amount that depends on the household’s share of the tax burden. If the household’s tax burden exactly equals the cost of public school, the budget constraint is no longer the line segment AB but rather the segment CDB, where the segment DB runs along the original budget constraint, except that the minimum amount of schooling consumed is eP. 3. The question distinguishes between a private market for higher education, in which students would have to pay their own tuition, and a system of taxpayer-financed higher education. The examples cited in France and Germany illustrate a third option of little or not support of higher education from either private tuition dollars or public tax dollars. If a government disallows either type of support, then the result will be very little higher education, or low-quality higher education. For most, the debate centers on the choice between private support and public support. Some may conclude that efficiency is served by providing financial support usin