Final answer:
Subsidizing education is the government action intended to generate positive externalities by making it more affordable, leading to benefits for both the individual and the society.
Step-by-step explanation:
The government action intended to generate positive externalities is subsidizing education. A subsidy helps lower the cost of education, making it more accessible and encouraging a higher level of educational attainment within the society. This in turn results in benefits not only for the individual but for the economy and society as a whole. By providing an education subsidy, the government can bridge the gap between the market price and the social optimum level of education, leading to a socially optimal level of education consumption.