Economics of Public Policy Final Exam
Questions
Course Introduction
Economics of Public Policy examines the economic principles and analytical tools used to evaluate and design effective public policies. The course explores how governments intervene in markets, the rationale behind various policy choices, and the potential outcomes of policy interventions on efficiency, equity, and welfare. Students will analyze real-world policy issues such as taxation, public goods provision, social insurance, environmental regulation, and income redistribution. Through case studies and empirical evidence, the course equips students with the skills to assess the economic impacts of public policies and to critically evaluate policy proposals in local, national, and international contexts.
Recommended Textbook
Economics of Social Issues 20th Edition by Ansel Sharp
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15 Chapters
1882 Verified Questions
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Chapter 1: Alleviating Human Misery: The Role of Economic Reasoning
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124 Verified Questions
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Sample Questions
Q1) The fact that resources are rarely perfectly substitutable gives the production possibilities curve its bow shapE.
A)True
B)False
Answer: True
Q2) The available data on various countries of the world show that there is an inverse relationship between population densities and per capita GDP.
A)True
B)False
Answer: False
Q3) Income inequality is a problem faced by the developed countries,as well as the developing countries,of the worlD.
A)True
B)False
Answer: True
Q4) GNP would include the value of value of Honda Accords built in Ohio.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Economic Systems, Resource Allocation, and
Social Well-Being: Lessons From Chinas Transition
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) In response to an increase in the price of beer,Bob reduces his consumption from 3 to 2 beers per day.This
A)True
B)False
Answer: False
Q2) An increase in the price of a good will decrease demand for the good
A)True
B)False Answer: False
Q3) In the long run,an increase in the demand for a good will result in an increase in supply of the good in a market economy
A)True
B)False Answer: True
Q4) In the short run,an increase in demand for a good will result in higher prices in a market economy
A)True
B)False
Answer: True
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Chapter 3: Government Control of Prices in Mixed Systems:
Who Are the Winners and Losers
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Sample Questions
Q1) Some universities have rent controlled student housing. A)True
B)False Answer: True
Q2) The marginal product of the first worker is A)0
B)10
C)40
D)50
E)Unable to be determined
Answer: B
Q3) As the wage increases,the quantity of labor an individual supplies may decreasE. A)True
B)False
Answer: True
Q4) The first U.S.minimum wage was set at 25 cents an hour. A)True
B)False
Answer: True
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Chapter 4: Pollution Problems: Must We Foul Our Own Nests
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Sample Questions
Q1) Direct or mandatory control imposed by government on polluters presupposes that the regulatory body can
A)Determine what the desirable limits of pollution are
B)Determine where the marginal costs of pollution are greatest
C)Enforce standards
D)B and c
E)All of the above
Q2) An upstream paper mill pollutes water used by a downstream water bottling plant,forcing the latter to clean the water it uses.Which of the following is true?
A)Both will over-produce
B)The paper mill will under-produce and the bottling plant will over-produce
C)The paper mill will over-produce and the bottling plant will under-produce
D)Both will under-produce
E)Neither will over-produce or under-produce
Q3) Federal grants made to state and local governments for the construction of sewage treatment facilities encourage private industries to develop low pollution methods of production.
A)True
B)False
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Chapter 5: Economics of Crime and Its Prevention: How
Much Is Too Much
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126 Flashcards
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Sample Questions
Q1) A characteristic of a public good or service is
A)That no individual can identify specifically the part of it that he or she consumes
B)Once the good is provided,it is difficult or impossible to exclude anyone from using it
C)If it is provided privately,it generates a "free-rider" problem
D)One person's use does not decrease the quantity available for others
E)All of the above
Q2) The opportunity cost of jail time is what you could have done had you not been in jail.
A)True
B)False
Q3) In the United States,the federal government spends more for corrections than state and local governments.
A)True
B)False
Q4) If abortion is made illegal,demand and supply will fall.
A)True
B)False
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Chapter 6: The Economics of Education: Crisis and Reform
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Sample Questions
Q1) Increased spending on K-12 education is certain to be cost-effectivE.
A)True
B)False
Q2) The existence of spillover benefits results in an equilibrium quantity in the market that is socially optimal.
A)Higher than
B)Lower than
C)Equal to
D)Better than
E)More expansive than
Q3) A program to provide public funding for students in poor performing public schools to attend other schools is known as
A)A voucher program
B)A charter school
C)A tuition tax
D)A welfare program
E)Privatization
Q4) Lower tuition rates lead to less education.
A)True
B)False
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Chapter 7: Poverty Problems and Discrimination: Why Are
so Many Still so Poor
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121 Verified Questions
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Sample Questions
Q1) Costs to taxpayers of a negative income tax plan vary inversely with the guaranteed level of income and directly with the income tax rate on earned incomE.
A)True
B)False
Q2) In a private enterprise system a sound comprehensive antipoverty program must include measures to increase the productivity of the poor.
A)True
B)False
Q3) Income support programs designed to alleviate poverty have mitigated the economic hardship of low-income families and individuals.
A)True
B)False
Q4) The incidence of poverty is highest among
A)Black families
B)Families headed by a female
C)Young families
D)White families
E)Small families
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Chapter 8: The Economics of Monopoly Power: Can Markets
Be Controlled
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Sample Questions
Q1) For a firm,at the output level at which marginal revenue equals marginal cost,
A)Profits are highest
B)There is neither unemployment nor inflation
C)Output is maximized
D)Revenues are maximized
E)Costs are minimized
Q2) At what level(s)of output do reductions in the average costs of production cease?
A)0
B)0 - Q<sub>0</sub>
C)Q<sub>0</sub>
D)Above Q<sub>0</sub>
E)There are no reductions in the average costs of production
Q3) The dead-weight welfare loss due to monopoly is
A)Too small to be important
B)About 10% of GDP per year
C)Unable to be determined in a complex economy such as our own
D)About 1% of GDP per year
E)About .01% of GDP per year
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Chapter 9: The Economics of Professional Sports: What Is the
Real Score
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120 Flashcards
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Sample Questions
Q1) Professional sports leagues are both cartels and monopsonies.
A)True
B)False
Q2) Which of the following statements is true?
A) From an economic perspective, most professional athletes do not earn their pay
B) Salaries in any industry reflect labor's contribution to the overall health and well-being of society
C) Professional sports clubs operate in highly competitive product and resource markets
D) The cartel behavior of professional sports leagues keeps ticket prices low
E) The salary of a professional athlete reflects his contribution to his employing club's revenue
Q3) All professional sports clubs must operate independently to guarantee a competitive economic environment.
A)True
B)False
Q4) In football,new players can sell their services to the highest bidding NFL team. A)True
B)False
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Chapter 10: Competition in the Global Market-Place: Should
We Protect Ourselves From International Trade
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Sample Questions
Q1) A $100 per unit tariff on South African diamonds will increase the price by $100.
A)True
B)False
Q2) A nation that enjoys a lower opportunity cost in the production of goods,relative to another nation,is said to have a(n)
A)Market advantage
B)Absolute advantage
C)Comparative advantage
D)Relative cost advantage
E)Production advantage
Q3) The primary factor affecting the demand for any nation's currency is
A)The nation's current standing with the United Nations
B)The demand for the products produced by that nation
C)The size of the nation's domestic economy
D)The amount of gold reserves held by that nation
E)None of the above
Q4) It is efficient for an economy to save service jobs by preventing outsourcing.
A)True
B)False
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Chapter 11: Economic Growth: Why Is the Economic Road so
Bumpy
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138 Flashcards
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Sample Questions
Q1) Close examination of the recent history of real GDP in the U.S.reveals that the rate of economic growth has been diminishing over timE.
A)True
B)False
Q2) What is the result of a growing labor force?
A)Lower rates of interest in the capital market
B)Higher rates of unemployment
C)The economy's production possibilities curve shifts outward
D)The economy's production possibilities curve shifts inward
E)The economy's rate of growth must slow to accommodate more people
Q3) The term investment is used to describe the purchase of consumer goods by households in the economy.
A)True
B)False
Q4) Joseph Schumpeter theorized that business cycles were determined primarily by long-run waves of innovation.
A)True
B)False
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Chapter 12: Money,Banking and the Financial System: Old
Problems With New Twists
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Sample Questions
Q1) Investment banks
A)Make loans to individual households to buy houses and cars
B)Work with corporations to finance their operations through primary financial markets
C)Work with corporations to finance their operations through secondary financial markets
D)Work with investments from private individuals
E)None of the above
Q2) Investment banks assist corporations in issuing stocks and bonds in the primary financial market.
A)True
B)False
Q3) Throughout the history of the U.S.,until the creation of the Federal Reserve System in 1913,the monetary system was
A)Characterized by a series of panics and periods of instability
B)Under the control of the Second Bank of the United States
C)The product of the work of President Andrew Jackson
D)Based upon the English system
E)Under the supervision of the US Mint
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Chapter 13: Unemployment and Inflation:
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Sample Questions
Q1) Unemployment rates since 2007 have increased due to rising structural unemployment.
A)True
B)False
Q2) The Phillips curve depicts the relationship between
A)Output and inflation
B)Savings and investment
C)Unemployment and inflation
D)Imports and exports
E)None of the above
Q3) Frictional unemploymentrefers to persons who are unemployed because the economy is in a recession.
A)True
B)False
Q4) Which of the following individuals is considered part of the labor force?
A)An unemployed farmer
B)A college graduate looking for his first job
C)A retired teacher working as a sales clerk
D)A department store Santa during December
E)All of the above
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Chapter 14: Government Spending,Taxation,and the
National Debt: Who Wins and Who Loses
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Sample Questions
Q1) The federal budget has been in deficit each year since the beginning of the 1970s.
A)True
B)False
Q2) Which of the following shifts represents the effect of a tax on this good levied independent of output?
A)D to D<sub>1</sub>
B)D<sub>1</sub> to D
C)S to S<sub>1</sub>
D)S<sub>1</sub> to S
E)None of the above
Q3) Given demand curve D,if a tax independent of output is levied on this good,how much of the tax will be shifted forward?
A)None
B)One-fourth
C)Half
D)All
E)Cannot be determined
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Chapter 15:
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Sample Questions
Q1) Which of the following is true concerning Social Security's retirement benefit structure?
A)All eligible retired workers are entitled to the same benefits
B)High wage workers receive a greater percentage of past earnings in benefits than low wage workers
C)Retired female workers are entitled to higher benefits than retired male workers
D)Low wage workers receive a greater percentage of past earnings in benefits than do high wage workers
E)Retired workers living in cities receive larger benefits than those living in rural areas
Q2) How many Americans receive a monthly check from the Social Security Administration?
A)Fewer than 10 million
B)More than 50 million
C)About 27 million
D)Roughly 38 million
E)More than 100 million
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