Problem
"Improved education for our children leads to benefits that accrue to society in general in the form of a better-informed electorate, less crime, and other social benefits. Therefore, education should be subsidized by the government." Before commenting, read the following: "Slum districts and low-quality housing impose a social cost on society in the form of greater fire and police protection than are now required. The crowded living conditions also place extra demands on the community's educational and health facilities."
a. Should external benefits be subsidized, and activities that result in external cost be taxed? Why? Present, as strongly as you can, the case for such taxes and subsidies.
b. Present, as strongly as you can, the case against taxes and subsidies as a method of handling external effects.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.