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Assignment:
In most countries, education is heavily subsidized, via either grants for the cost of living or subsidies for the direct cost of education (teacher salaries, classrooms and lecture halls). Discuss briefly the following arguments regarding this issue using the human capital model and signalling model:
(a) When and why might education be left to the market?
(b) When might education be subsidized?
(c) Would the government have incentive to tax education? Who would benefit? Who would lose?
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