Economics (AS & A Level) · May / June 2021 · Paper 12 · Question 18
9708Classification of goods and services
Education from 4 to 16 years of age in most developed economies is provided at zero price, financed from taxation. Why should the government do this?
- AIn a free market, consumers have imperfect information so do not realise the full personal benefit of education.
- BIn a free market, education is not considered to be a private good.
- CIn a free market, consumers will be unwilling to pay for education.
- DIn a free market, education is non-rival and non-excludable in consumption so zero output would be produced.
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Correct answer: A. In a free market, consumers have imperfect information so do not realise the full personal benefit of education.
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