Public Policy Analysis Practice Questions
Course Introduction
Public Policy Analysis explores the systematic evaluation of public programs and policies with an emphasis on methodologies and tools used to assess policy effectiveness, efficiency, and equity. The course covers the policy-making process, identification of policy problems, formulation of alternatives, and methods for policy evaluation, including cost-benefit and cost-effectiveness analysis. Students will examine case studies, learn to critically assess policy outcomes, and develop practical skills for advising decision-makers on the design and implementation of public policy.
Recommended Textbook
Modern Labor Economics Theory and Public Policy 11th Edition by Ronald G. Ehrenberg
Available Study Resources on Quizplus
16 Chapters
594 Verified Questions
594 Flashcards
Source URL: https://quizplus.com/study-set/1361
Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/27161
Sample Questions
Q1) Either Worker A or Worker B will produce $20,000 of output for Employer X (who only needs one worker). Worker A could produce $12,000 worth of goods elsewhere (this is Worker A's best alternative); Worker B could produce $15,000 worth of goods elsewhere (this is Worker B's best alternative). Which of the following (if they occur) is not Pareto Efficient in the sense that gainers cannot compensate losers for their losses?
A) Employer X hires Worker B for $18,000.
B) Employer X hires Worker A for $18,000.
C) Employer X hires Worker A for $14,000.
D) Employer X hires Worker A for $5,000.
Answer: A
Q2) Which of the following is NOT a characteristic of a typical positive economic model?
A) realistic assumptions
B) makes predictions that can be proven false
C) the assumption that people weigh the costs and benefits of their various alternatives
D) makes assumptions that ignore the complexity of behavior
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Overview of the Labor Market
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/27162
Sample Questions
Q1) When wages increase, the substitution effect implies that employment will ________ and the scale effect implies that employment will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: D
Q2) If the price of a product decreases due to a decrease in demand, then
A) the firm moves to the left along the labor demand curve.
B) the firm moves to the right along the labor demand curve.
C) the labor demand curve shifts to the left.
D) the labor demand curve shifts to the right.
Answer: C
Q3) If the salaries of accountants increase and other conditions remain the same, then
A) a firm will move to the left along its labor demand curve for accountants.
B) a firm will move to the right along its labor demand curve for accountants.
C) the labor demand curve for accountants will shift to the left.
D) the labor demand curve for accountants will shift to the right.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: The Demand for Labor
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27163
Sample Questions
Q1) In the short run
A) a firm can not hire new workers.
B) wage rates and product prices cannot change.
C) a firm can not add on to an assembly line or introduce new machines to the production process.
D) employment levels cannot change.
Answer: C
Q2) If skilled workers are gross complements with low-skilled immigrant labor, then when there is an increase in low-skilled immigrant labor
A) skilled workers wages will go down but their employment will go up.
B) skilled workers wages will go down and their employment will go down.
C) skilled workers wages will go up and their employment will go up.
D) skilled workers wages will go up and their employment will go down.
Answer: C
Q3) If labor costs twice as much as capital (per unit), then, in the long run,
A) labor will be twice as productive on average as capital.
B) labor's marginal product will be twice that of capital's.
C) the firm will hire twice as much labor as capital.
D) the firm will hire less labor and more capital.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Labor Demand Elasticities
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27164
Sample Questions
Q1) If the quantity of auto workers demanded decreases from 66,000 to 54,000 when the equilibrium wage increases from $12.00 per hour to $14.00 per hour, then the own-wage elasticity of demand for these workers is
A) inelastic.
B) elastic.
C) zero.
D) neither elastic nor inelastic.
Q2) Moving from the upper to the lower portion of a straight labor demand curve, the elasticity
A) changes from elastic to inelastic.
B) changes from inelastic to elastic.
C) stays the same.
D) could change from inelastic to elastic, or from elastic to inelastic.
Q3) If the absolute elasticity of labor demand is 2.0, then an eight percent increase in the wage will
A) increase employment by 16%.
B) increase employment by 4%.
C) decrease employment by 16%.
D) decrease employment by 4%.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Frictions in the Labor Market
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/27165
Sample Questions
Q1) A public school currently it pays all teachers the same, regardless of their area of expertise. At $70,000, it hires good teachers in all areas except science. Because science is a field in demand, the school can only hire poor science teachers. It would have to pay science teachers $90,000 to hire good science teachers. If one out of five teachers is a science teacher, what is the marginal expense of getting a good science teacher instead of a poor one?
A) $90,000
B) $100,000
C) $20,000
D) $450,000
Q2) Training costs
A) exclude opportunity costs of trainees' time.
B) arise mostly from out-of-classroom training.
C) exclude the opportunity cost of using capital equipment.
D) exclude opportunity costs of trainers' time.
Q3) A firm could profitably pay for a worker's general training if
A) the worker could change jobs easily.
B) the worker was nearing retirement.
C) the training program would also serve as a screening device.
D) the training increased the quasi-fixed costs of hiring the worker.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Supply of Labor to the Economy: the Decision to Work
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27166
Sample Questions
Q1) A decrease in the implicit tax rate on welfare benefits serves as
A) an incentive to work fewer hours.
B) an incentive to work more hours.
C) a way to decrease the incomes of welfare recipients.
D) a way to decrease spending on benefits.
Q2) An increase in the marginal tax rate will cause
A) a pure income effect.
B) a pure substitution effect.
C) both an income and a substitution effect.
D) neither an income nor a substitution effect.
Q3) If a worker's desired hours of labor do not change after a decrease in his wage rate, then
A) his income effect dominates his substitution effect.
B) his substitution effect dominates his income effect.
C) his income and substitution effects are of equal magnitude.
D) his income and substitution effects are small in absolute value.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/27167
Sample Questions
Q1) In a two-person household, assume Tracy earns the most income and is totally incompetent in raising children. The other person in the household, Pat, is competent at raising children. Pat is more likely to stay at home and raise the child when
A) Tracy's income is high and Pat's wage is low.
B) Tracy's income is low and Pat's wage is low.
C) Tracy's income is low and Pat's wage is high.
D) Tracy's income is high and Pat's wage is high.
Q2) A single mother is currently paying childcare cost of $10 an hour and she works 8 hours a day. The government then provides "free" child care, raising the property tax on the mother's home by $80 a day. The effect of this event will be to
A) cause the mother to work less hours.
B) cause the mother to work the same hours.
C) cause the mother to work more hours.
D) cannot tell without knowing which effect dominates: the income or substitution effect.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Compensating Wage Differentials and Labor
Markets
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27168
Sample Questions
Q1) When workers indifference curves are drawn for wage rates versus injury risk
A) the indifference curves slope downwards because a higher wage is required to accept a higher risk of injury.
B) the indifference curves slope upwards because a higher wage is required to accept a higher risk of injury.
C) utility increases as a worker moves to the right along an indifference curve.
D) utility decreases as a worker moves to the right along an indifference curve.
Q2) Firm A's isoprofit curves are flatter than those of firm B. Therefore,
A) firm A will be willing to pay a larger compensating differential than firm B.
B) firm B will be willing to pay a larger compensating differential than firm A.
C) both firms will pay the same compensating differential, but firm B will have higher profits than firm A.
D) risk is more costly to reduce in firm A than in firm B.
Q3) When we state that compensating wage differentials exist for comparable workers, we do NOT assume that
A) workers have several jobs to choose from.
B) workers maximize utility.
C) workers maximize income.
D) workers accurately assess the non-pecuniary benefits of jobs.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Investments in Human Capital: Education and Training
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/27169
Sample Questions
Q1) Which of the following is NOT an expense of acquiring human capital?
A) purchase of textbooks
B) anxiety caused by final exams
C) any wages foregone to attend school
D) cost of food and housing while attending school
Q2) A college education for Bill, using the market rate of interest of 5%, has a net present value of $50,000. Which of the following is an internal rate of return consistent with this present value?
A) 4%
B) 5%
C) 6%
D) -5%
Q3) Workers with relatively high levels of natural ability are quite likely to attend college. This can cause ________ bias when estimating educational returns because
A) an upward; ability increases earnings
B) a downward; ability increases earnings
C) an upward; other benefits of college are ignored
D) a downward; other benefits of college are ignored
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Worker Mobility: Migration, Immigration, and Turnover
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/27170
Sample Questions
Q1) One immigrant to country X increases his wage from $13,000 (in their home country) to $15,000. There are no costs to moving. A native worker was earning $15,000. However, the immigrant replaces him and the native instead lives and works at home, which he values at $15,000. Which of the following statements is true?
A) Country X (not counting the immigrant) is better off.
B) The native worker is worse off.
C) The immigrant could be taxed $1000 with the proceeds going to the native worker and the employer so that everyone is better off (compared to no immigration).
D) The net benefit of this immigration to everyone (native worker, employer, immigrant) is zero.
Q2) The most important determinant of migration is A) education.
B) race.
C) age.
D) experience.
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Pay and Productivity: Wage Determination
Within the Firm
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/27171
Sample Questions
Q1) An employer and a worker, if both are honest and work hard, together produce $200,000 a year, of which the employer gets $50,000 and the worker $150,000. If either one is dishonest and lazy, they break up, the employer employs someone else and the worker gets another employer. The following shows what they might earn if they broke up. In which case is it likely that both the employer and the worker will be honest and hard working?
A) if they break up, the employer makes $60,000 and the worker $80,000
B) if they break up, the employer makes $20,000 and the worker $175,000
C) if they break up, the employer makes $75,000 and the worker $175,00
D) if they break up, the employer makes $25,000 and the worker $125,000
Q2) A firm penalizes workers who take excessive sick days. As a result, sick workers come to work, make other workers sick, and reduce the firm's productivity. This is an example of A) moral hazard.
B) efficiency wage.
C) pay based upon measured aspects of work.
D) signaling.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Gender, Race, and Ethnicity in the Labor Market
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27172
Sample Questions
Q1) Which of the following can NOT explain differences in earnings of men and women?
A) experience
B) occupation
C) unobservable characteristics
D) income maximization by all workers
Q2) Customer discrimination will cause
A) segregated workplaces.
B) no wage differentials.
C) firms to give up profits to maximize utility.
D) discriminating customers to pay lower prices.
Q3) Actual efforts to identify wage discrimination in the labor market
A) provide conclusive proof that wage discrimination against women exists and reduces their wages by about 10%.
B) provide conclusive proof that wage discrimination against women exists and reduces their wages by about 20%.
C) cannot prove the existence of wage discrimination because some important unmeasurable characteristics differ by gender.
D) cannot prove the existence of wage discrimination because some important measurable characteristics differ by gender.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Unions and the Labor Market
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27173
Sample Questions
Q1) The relative union wage advantage is generally
A) about 50% in the United States.
B) smaller in the United States than in Europe.
C) larger in the public sector than in the private sector.
D) larger during recessions.
Q2) Unionization rates in the United States are highest
A) among white workers.
B) among young workers.
C) in the government sector.
D) in the manufacturing sector.
Q3) Estimating the effect of unions on wages is difficult because
A) data on wages in union and non-union jobs are scarce.
B) relative wage effects are often indeterminate.
C) there is no way to estimate what wages would be if unions did not exist.
D) unions have no effect on the non-union segment of the labor market.
Q4) If both parties become more risk averse, then the contract zone will
A) increase in size.
B) decrease in size.
C) not change in size.
D) move to the right along the horizontal axis.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Unemployment
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27174
Sample Questions
Q1) In claimant bonus experiments, bonuses to workers ________ the average duration of unemployment, and bonuses to employers ________ the average duration of unemployment.
A) increased; did not change
B) decreased; did not change
C) did not change; increased D) did not change; decreased
Q2) A worker who has quit one job to have time to search for a similar position is counted as what type of unemployment?
A) frictional
B) occupational
C) regional
D) cyclical
Q3) A nation has full employment when A) wages and prices are stable.
B) unemployment is at its lowest level.
C) unemployment rates are the same across all demographic groups.
D) workers are earning a living wage.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Inequality in Earnings
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/27175
Sample Questions
Q1) According to the text, the main reason for the increase in inequality since 1980 is A) the policies favored by Ronald Reagan.
B) higher compensation of corporation bosses.
C) technical change favoring those with more human capital.
D) decreased international trade.
Q2) The widget industry is perfectly competitive and produces 1000 widgets. Currently, it takes one unit of skilled labor and two units of unskilled labor to produce one widget. Technological change then increases the productivity of skilled labor only. Afterward, the total employment of skilled workers goes up. Which of the following is consistent with this result?: ________ units of skilled workers and two units of unskilled labor are needed to produce one widget and total output is ________ widgets.
A) 0.75, 1100
B) 1.25, 1600
C) 1.25, 1100
D) 0.75, 1600
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: The Labor Market Effects of International Trade and
Production Sharing
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/27176
Sample Questions
Q1) Which of these displaced workers is likely to be most harmed by losing their job due to foreign trade?
A) Worker A who has firm-specific skills.
B) Worker B who has general skills.
C) Worker C who has a very elastic supply curve of labor.
D) Worker D who spends a large fraction of her income on imported goods.
Q2) In industry X, all of its output is made in America. But then a foreign nation's workers can produce at least part of the industry X's good at a lower wage. The reduction in American jobs in industry X will be smaller when
A) American workers, while getting a wage twice that of foreigners, are 50% more productive.
B) the supply of labor supply is highly elastic.
C) the elasticity of supply of American workers is more inelastic.
D) American workers are excellent substitutes for foreign workers.
Q3) The wages of workers displaced by international trade will fall less when A) the substitution effect is larger.
B) the scale effect is larger.
C) workers are close substitutes with foreign workers.
D) unemployment benefits are made less generous.
Page 18
To view all questions and flashcards with answers, click on the resource link above.