Monday 28 November 2011

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1) What information failures are there in the market for higher education places?
There are two major information failures in the education market. Firstly that not all students know all the available place in every since there are just too many different universities, and no human being will be able to research all the available places.  The second one is that students must apply to university, therefore universities do not know all the students but only a small procent of possible applicants. 

2) What externalities are involved in higher education and will this lead to an over or underprovision of higher education in a pure market system?
There are positive externalities in consumption in higher education. This means that the MSB is above the MPB on the externality diagram. This meaning that when people consume (learn) they become educated and then go of to inventing and researching or taking a more advanced job than taking out the trash. 

As depicted in the diagram above higher education in consumption produces a positive externality. This is the yellow area on the diagram. I myself do not know why the government in England would stop subsidizing higher education, although there is an argument that we are in recession and that the government needs money, but I believe there are other things that can be reduced in government spending instead of higher education. This is just my view and probably because I am a soon to be student, meaning I am one of the first to go to university in the UK paying 9000 pounds instead of 3000. 

3) What are the arguments for subsidising non-STEM subjects (as well as STEM ones)? Should these subsidies vary from course to course and from university to university?
Well the arguments are that STEM courses are often much more expensive than a english course, and student fees might not cover the costs. This is due to students conducting experiments on expensive equipment and using expensive materials. The sciences are indeed quit an expensive course. 
4) What is the best way of tackling the problem of unequal access to higher education?
Looking from the view point of the general majority, this would be to banish private education and have all kids go to public schools. As well as stop paying student fees and make all citizens pay for education even if they are not going to university. Although these methods have quit a few flaws in them, since if private schools will be banished a kind of black market would apear, since all people will money and power would send their children to publics schools which are in average better, but now money would not be playing a big role but the connections and location of living. Lets say the schools only accept people living close by this would create the land around the school to shoot up in price and make a huge separation of the rich and poor. 


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