Question:

5 The food processing, tourism, and education industries all contribute significantly to the government
budget for the US state of Wisconsin. The contribution of the education industry is higher than that
of other industries due to the higher wages earned in education. This industry also contributes to
the population growth of the state. This not only creates private benefits but also external benefits.
(a) Define government budget. [2]
(b) Explain, with examples, the difference between private benefits and external benefits. [4]
(c) Analyse the reasons why workers employed in education may earn more than workers
employed in other industries. [6]
(d) Discuss whether or not having a large population is beneficial for the economy. [8]

Sample Answers: