Question

9. Joe really does not enjoy school and is thinking about dropping out this spring Joe's con- sumption of formal education is likely to A. be the efficient amount of education because Joe knows best the level of benefit he re- B. be at too high a level because Joe has always been an indifferent student who has rarely C. be at too low a level because Joe considers only his private benefits from getting an edu- D. reflect his family's benefit from his getting an education, and his family thinks they will ceives from attending school. been engaged in getting an education. cation and not the social benefits that society receives when he gets an education. get a greater benefit if Joe drops out and gets a job. From his family's perspective, this would be an efficient outcome

Answer 1

The correct answer is option C

Explanation:- When Joe drops out of school, he might join work to make a living and he will make modest wages as his education level is not high. If Joe had completed formal education, he would be earning higher wages and the society would also benefit as higher wages earned by Joe will make him pay higher taxes. Thus by dropping out from school, Joe is only considering his own personal benefits and not taking into account the benefit society would receive if he had a higher level of education.