Question

select the correct answer.
what economic concept is applied in this statement?
by earning higher levels of education, students learn skills and are more likely to be employed. in their jobs, they use their skills to provide goods and services to others.
a. equilibrium
b. law of demand
c. law of supply
d. negative externality
e. positive externality

Explanation:

• Equilibrium: Refers to a state where supply and demand are balanced. The statement is not about balance between supply and demand.
• Law of demand: States that as price increases, quantity demanded decreases (ceteris paribus). The statement has nothing to do with price - quantity demanded relationship.
• Law of supply: States that as price increases, quantity supplied increases (ceteris paribus). The statement is not about price - quantity supplied relationship.
• Negative externality: Is a cost imposed on a third - party. The statement is about a beneficial effect (students providing goods and services after education), not a cost.
• Positive externality: A benefit that a third - party receives. When students get higher education, learn skills, get employed and provide goods and services to others, it is a positive impact on society (a third - party benefit).

Answer:

E. positive externality