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Flashcards in Economics of Education Deck (9)
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1

Opportunity costs of education

- Measured as a value of foregone earnings
- Low for K-12 (not many jobs)

2

Direct costs

- Include tuition, fees, books, supplies, and other items necessary for school

3

Marginal costs

- To determine optimal leve,understand MC
- Increased costs associated with obtaining an additional year of eduction
- As education increases, MC of education increases

4

Human capital

- Acquired skills and knowledge that make one more productive

5

Positive externalities

- Benefits received by third parties

6

Negative externalities

- Costs imposed on third parties

7

Private marginal benefits

Accrue only to individual obtaining education

8

Social marginal benefits

MB that accrue to society as a whole

9

MBsocial equation

MBsocial = MBprivate + External Benefits