Answer to Question #111902 in Macroeconomics for Parth

Question

Most students pay no direct cost in terms of money for public education. To them the value of their education is a consumer surplus. Why doesn’t this result in lots of students demanding extra homework and remedial classes after school?

Answer 1

Surplus consumer - this is the difference between the maximum price the consumer is willing to pay and the actual price they pay. If the consumer is willing to pay more than the current asking price, then they get more benefit from the purchased product than they originally paid.

These students believe that since they got a free education, then they may not require additional tasks and correctional classes.

The psychology of these students is this: since education is free and they do not spend their money in order to get it, then the value of this education and usefulness decreases for them.