TAILIEUCHUNG - Lecture Issues in economics today - Chapter 25: Education

After studying this chapter you will be able to understand: Understand why a college education is so expensive and why those costs have been rising faster than inflation; explain the role of textbooks in those rising costs; apply the principle of present value so as to see why borrowing money to pay for a college education is a wise, if potentially risky investment in future income potential; understand that the United States has a greater percentage of citizens with a college degree than other developed countries, though that advantage is rapidly evaporating. | Chapter 25 Education Chapter Outline INVESTMENTS IN HUMAN CAPITAL SHOULD WE SPEND MORE? SCHOOL REFORM ISSUES COLLEGE AND UNIVERSITY EDUCATION Investments in Human Capital Human Capital: the ability of a person to create goods and services An education is an investment like any other. You incur costs early You reap rewards later Any investment only makes economic sense if the net present value (the present value of the benefits minus the present value of the costs) is positive. Why “Free” Public Schools are not “Free” Taxpayers pay $389 billion in taxes to support the system. Some states and school districts have fees (such as textbook rental) that parents must pay. Analyzing the Education Decision If parents had to pay the entire cost of K-12 education and chose not to send their children to school they would still incur daycare costs for their smaller children. Parents would then compare the present value of benefits to the present value of the tuition costs minus daycare costs. Why

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• Issues in economics today
• Lecture Issues in economics today
• Macroeconomic issues
• International issues
• Price control issues
• Human capital
• Economics of crime
• Economics of children
• Opportunity cost
• Prescription drugs
• Demand model
• Elasticity of demand
• Firm production
• Perfect competition
• Gross domestic product
• Federal spending
• Fiscal policy
• Monetary policy
• Flaws in the CPI
• International trade
• International monetary fund
• Trade agreements
• Economic model
• Environmental problems
• Economic models of health care
• Medicaid costs
• Public insurance
• Measuring poverty
• Social security
• Head start