Final answer:
The statement refers to a positive externality, where the benefits of higher education extend beyond the individual to society by providing a more skilled workforce that enhances economic productivity and growth. Therefore, the correct option is E.
Step-by-step explanation:
The economic concept applied in the statement "By earning higher levels of education, students learn skills and are more likely to be employed. In their jobs, they use their skills to provide goods and services to others." is E. positive externality. A positive externality occurs when an individual or firm engages in an activity that results in positive benefits to others who are not involved in the activity. In this context, the education and skills acquired by students lead to benefits for society as a whole, since the educated workforce contributes to the economy by providing their skilled labor.
When individuals invest in their education, they enhance their skills and productivity, resulting in higher wages for themselves and improved quality of goods and services for the society. Employers benefit from the performance and competencies of more educated employees, and society benefits from the overall economic growth and improvements in standards of living. This is why economists see education as a form of investment that pays dividends not only to the individual but also to the community at large, thus qualifying as a positive externality.