If God is all good why is there evil in the world? Couldn't he create a world with all good?

During class this past week we covered quite a few topics but one that I found interesting was, If God is all good why is there evil in the world? Couldn't he create a world with all good? These questions deffinatly got me thinking and I honestly dont know why he wouldnt make a perfect world if he could. Maybe he wants us to figure out a good balance on our own. Giving us freewill to discover the lives we wish to make. Allowing us to create our own lives with as much good or evil as we choose. But then that leads me to wonder, how much is too much evil? Whats the limit of evil that decides whether we go to heaven or hell? When does God stop forgiving us for our sins?