Final answer:
Private values refer to individual benefits, while social values encompass collective benefits, such as those provided by public education. The term 'social benefits' includes both private benefits and positive externalities, with the social rate of return focusing on benefits primarily received by society as a whole.
Step-by-step explanation:
Private values refer to individual benefits, while social values encompass collective benefits. The correct answer to the provided question is option a) Collective benefits. Social values are about the benefits that accrue to society as a whole, as opposed to benefits that are received by an individual privately. When considering social benefits, these include not only private benefits but also external benefits, which are positive externalities that arise from certain actions or policies, such as providing free education.
The concept of social rate of return relates to investments or actions where the primary rates of return are enjoyed by society at large rather than by individual private investors. An example of this would be public education, which benefits the individual receiving the education and society by creating a more educated workforce. As illustrated by sources such as LibreTexts, the interplay between private costs and benefits, and social costs and benefits, demonstrates that when externalities such as pollution exist, there can be a market failure where social costs exceed social benefits, leading to an inefficient market output.