In 2021, 1450 people received Masters Degrees from the University of Houston. Each started jobs that paid at least $185,000 per year and each purchased a home in a nice neighborhood.

Explain in detail, the economic effects of spillover benefits. Specifically:

Identify the 3^rd parties.

Explain how those recent graduates and new homeowners provided benefits to the 3^rd parties.

Explain how those 3^rd parties behaved relative to compensation for the benefits they received.

Explain how the behavior of the 3^rd parties impacted the allocation of the resources required to produce additional graduates.

Explain how you would use one of the tools covered in the slides to correct this spillover

benefit problem.