ESSAY : You are asked to apply the principles of public finance to the case of education.

In this homework, you are asked to apply the principles of public finance to the case of education.

Applying the principles of public finance, why should or should not the governments play a role in education more than the way they do now? (Please keep in mind, this assignment is not an opinion piece. It is an analytical assignment where the principles of public finance must be applied in your argument.) The key assumption is that if the issue exhibits signs of market failure then it may provide reasons for the role of government. Sample questions to ask include but not limited to:
Is education a public good? Yesmore government involvement; noless government
Is the education industry a natural monopoly? Yesmore government involvement; noless
To what extent does the education market have information asymmetry? A lot more government involvement; noless
To what extent does the education issue exhibit externality? A lot more government involvement; noless
Other reasons…

SAMPLE SOLUTION

Public Finance and Education
Public finance is the division of economics that deals with government income and expenditure (Dalton, 2009). Governments primarily earn income from taxing members of the public. Since the government ought to serve the people and tax money is obtained from the people, there are strict controls on government expenditure. The principles of public finance regulate how the government’s income is to be spent. Education is a public good as it is provided for the well-being and benefit of the public. The principle of maximum social advantage specifies that the government should incur expenditure if it benefits the whole community (Dalton, 2009). Since education plays an enormous role in enhancing society economically, socially, and politically, the governments around the world spend a lot of resources to subsidize education. Despite…