Jimmy, an economist, argues that governments should tax the general population in order to subsidize the post-secondary education of those attending universities and colleges. He says that "...everyone in society benefits from having an educated workforce." Jimmy also argues that there is a healthy private return to investing in a post-secondary education.

Using a well-labelled diagram, explain how subsidizing post-secondary education will improve economic efficiency/social welfare.

Clearly identify the type of market failure, why it exists, and explain how the subsidy will correct for this failure.