Public Policy Analysis
Test Bank
Course Introduction
Public Policy Analysis introduces students to the systematic study of the processes, tools, and methodologies involved in evaluating and formulating public policies. The course covers key concepts in problem definition, agenda setting, policy design, implementation, and impact assessment. Students learn to apply qualitative and quantitative techniques to analyze policy options, assess effectiveness, and understand the political, economic, and social contexts that shape public decision-making. By engaging with real-world case studies and practical exercises, students develop the analytical skills necessary to evaluate policy alternatives, anticipate unintended consequences, and contribute to evidence-based policymaking in diverse governmental and organizational settings.
Recommended Textbook
Microeconomics 2nd Edition by Dean Karlan
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23 Chapters
3122 Verified Questions
3122 Flashcards
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Page 2
Chapter 1: Economics and Life
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Which of the following describes when government alter normal market activity?
A) Innovation
B) Intervention
C) Market failure
D) Unprofitable outcome
Answer: B
Q2) The use of resources in the most productive way possible to produce the goods and services that have the greatest total economic value to society is called:
A) innovation.
B) efficiency.
C) sustainability.
D) economic quantity.
Answer: B
Q3) One of the most basic models of the economy is:
A) real GDP per capita.
B) the current population survey.
C) consumer expenditure.
D) the circular flow model.
Answer: D
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Page 3
Chapter 2: Specialization and Exchange
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) The concepts of comparative advantage,specialization,and trade:
A) can be useful in explaining why countries import and export certain goods.
B) can be useful in explaining why individuals typically work at one job, and buy the other goods and services they need.
C) can be useful in explaining why we allow ourselves to be interdependent on others.
D) All of the statements are true.
Answer: D
Q2) The improvement in outcomes that occurs when specialized producers exchange goods and services is called:
A) gains from trade.
B) absolute advantage.
C) comparative advantage.
D) specialization.
Answer: A
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4
Chapter 3: Markets
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158 Flashcards
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Sample Questions
Q1) The price of house paint,a normal good,has gone up.This change can be shown graphically as a:
A) shift in the demand curve to the right.
B) shift in the demand curve to the left.
C) movement along the demand curve to the right.
D) movement along the demand curve to the left.
Answer: D
Q2) Consider a market that is in equilibrium.If it experiences both a decrease in demand and a decrease in supply,what can be said of the new equilibrium? The equilibrium:
A) price and quantity will both fall.
B) quantity will definitely fall, while the equilibrium price cannot be predicted.
C) price will definitely fall, while the equilibrium quantity cannot be predicted.
D) price and quantity will both rise.
Answer: B
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Chapter 4: Elasticity
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Sample Questions
Q1) Demand tends to be more elastic when:
A) price is high and more inelastic when price is low.
B) price is low and more inelastic when price is high.
C) demand is perfectly inelastic.
D) the quantity demanded is larger.
Q2) A perfectly inelastic demand:
A) means people will quickly change the quantity they purchase when price changes.
B) means people will not respond to any change in price.
C) is demonstrated by a perfectly horizontal demand curve.
D) has an absolute value greater than 1.
Q3) The most commonly used measures of elasticity are:
A) income elasticity of demand and price elasticity of supply.
B) price elasticity of demand and price elasticity of supply.
C) cross-price elasticity of demand and cross-price elasticity of supply.
D) price elasticity of demand and cross-price elasticity of supply.
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Chapter 5: Efficiency
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Sample Questions
Q1) Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers was $12,then total producer surplus would be:
A) $7.
B) $9.
C) $17.
D) $30.
Q2) Well-being can be increased by:
A) policies that help people do business more efficiently.
B) technologies that help people share more and better information.
C) increasing the availability of accurate information.
D) All of these are true.
Q3) An example of a "missing" market would be:
A) the market to buy and sell children for adoption.
B) the market to buy and sell a kidney.
C) the market to buy and sell dates for a Friday night.
D) All of these markets are missing.
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Page 7
Chapter 6: Government Intervention Microeconomics
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156 Verified Questions
156 Flashcards
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Sample Questions
Q1) An argument against price floors is:
A) non-price rationing must occur, and can lead to consumers waiting in line.
B) the cost to taxpayers if the government buys all surplus.
C) producers will reduce the quality of the goods they sell.
D) they transfer surplus from producers to consumers.
Q2) When a tax is placed on buyers:
A) the resulting price paid by consumers is the same as if the tax were placed on sellers.
B) the resulting price received by sellers is the same as if the tax were placed on sellers.
C) the equilibrium quantity will unequivocally decrease.
D) All of these are true.
Q3) Does a tax on buyers affect the demand curve?
A) Yes, it shifts down by the amount of the tax.
B) Yes, it shifts to the left by the amount of the tax.
C) Yes, it shifts up by the amount of the tax.
D) No, there is change in the quantity demanded, but the demand curve does not move.
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Chapter 7: Consumer Behavior
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130 Verified Questions
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Sample Questions
Q1) When someone is served pizza and soda for dinner,it is typical behavior to eat some pizza,then drink some soda,then eat more pizza,and so on,until the person stops consuming both.How can this behavior be explained using economic concepts?
A) The individual is revealing that he can't decide whether he gains more utility from pizza or from soda.
B) People tend to act irrationally around food, and the concept of utility maximization cannot be applied.
C) The person eats pizza until his marginal utility for pizza is lower than it is for soda, then he switches to soda.
D) The concept of unlimited wants says he will never tire of eating pizza and soda.
Q2) A bundle:
A) is a specific combination of goods and services an individual could consume.
B) describes the amount of people that choose a particular combination of goods.
C) is a curve describing different combinations of goods and services an individual could choose to consume.
D) is when a store sells goods at a discounted price.
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Chapter 8: Behavioral Economics: A Closer Look at Decision Making
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Mark has $2000 saved for a trip at Spring Break.Over Winter Break,he decide to buy gifts for his family and puts over $500 on his credit card which charges 10% interest on the outstanding balance every month.He pays off the credit card bill gradually over the next two months.An economist would categorize that behavior as:
A) rational.
B) irrational.
C) misallocated.
D) scarce.
Q2) When people forget that money is ____________ they often make ______________ decisions.
A) fungible; liquid
B) fungible; irrational
C) liquid; irrational
D) liquid; rational
Q3) In economics,choosing one activity means:
A) choosing not to take advantage of another opportunity.
B) people always act rationally.
C) people signal they only like that activity.
D) that activity must be observable to be studied.
Page 10
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Chapter 9: Game Theory and Strategic Thinking
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147 Flashcards
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Sample Questions
Q1) If you are following a tit-for-tat strategy in a repeated game,and your opponent makes a cooperative move,you will:
A) collude.
B) make a cooperative move in the next round.
C) price compete.
D) defect.
Q2) Games:
A) only have one outcome possible.
B) with noncooperative equilibriums are always negative-negative outcomes.
C) may have several stable outcomes.
D) must have a dominant strategy present to reach a stable equilibrium.
Q3) First-mover advantage is:
A) most advantageous in a prisoner's dilemma-type game.
B) very important in one-round sequential games.
C) likely to lead to a positive-positive outcome.
D) None of these statements is true.
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Chapter 10: Information
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) One effect of government mandating participation in the auto insurance market is it leads to:
A) higher premiums for all participants.
B) lower premiums for all participants.
C) the collapse of the market.
D) free coverage for some participants.
Q2) A potential employee that dresses well for an interview is attempting to reduce asymmetric information by
A) looking more intelligent.
B) signaling their type.
C) showing moral character.
D) mandating that information be shared.
Q3) Statistical discrimination:
A) can limit the opportunities of individuals just because they happen to belong to a certain group of people.
B) is an irrational response to information asymmetry.
C) is always a legal solution to information asymmetry.
D) All of these statements are true.
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12
Chapter 11: Time and Uncertainty
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Present value:
A) is always greater than the future value of money.
B) does not account for inflation.
C) is how much an amount of money obtained in the future is worth today.
D) All of these statements are true.
Q2) Risk pooling:
A) reallocates the likelihood of catastrophes happening.
B) reallocates the costs of catastrophes when they occur.
C) diversifies the risk of catastrophes occurring.
D) gathers individuals with similar risks and pools them together.
Q3) Benefits today cannot be directly compared with costs in the future because:
A) money today is worth more than money in the future.
B) people do not have perfect willpower and will waste money today.
C) investments aren't always profitable.
D) more information is needed to make investment decisions than is typically available.
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Chapter 12: The Costs of Production
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142 Flashcards
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Sample Questions
Q1) A firm currently employs four workers in a sandwich shop,and produces sandwiches at a total cost per sandwich (ATC)of $3.The sandwiches sell for $5.If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich,then:
A) it will cost $5.50 to make another sandwich, which can only be sold for $5.
B) the firm will lose $0.50 per sandwich if it hires another worker.
C) the firm should not hire a fifth worker.
D) All of these are true.
Q2) Marginal product is represented by:
A) the x-axis of the total production curve.
B) total product minus the total cost.
C) the slope of the total production curve.
D) total revenue minus total cost.
Q3) If a firm produces nothing,then its:
A) variable costs equal zero.
B) fixed costs equal zero.
C) total costs equal zero.
D) All of these are true.
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14
Chapter 13: Perfect Competition
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156 Flashcards
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Sample Questions
Q1) A characteristic that is important,but not essential to defining a perfectly competitive market is:
A) goods are standardized.
B) buyers and sellers are price takers.
C) firms can freely enter and exit the market.
D) All of these are necessary to define a perfectly competitive market.
Q2) The long-run exit rule is to exit the industry if:
A) P > AVC.
B) P < AVC.
C) P > ATC.
D) P < ATC.
Q3) Having free entry and exit in a market can help drive:
A) innovation.
B) cost-cutting.
C) quality improvements.
D) All of these occur more often with free entry and exit.
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Chapter 14: Monopoly
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146 Flashcards
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Sample Questions
Q1) Protecting intellectual property rights:
A) always benefits society.
B) never benefits society.
C) rarely affects society overall.
D) is hotly debated as to whether it benefits or costs society overall.
Q2) Which of the following is not considered a barrier to entry into a monopoly market?
A) having a natural monopoly.
B) ownership of a key resource.
C) government intervention.
D) an new product-type is offered.
Q3) When a monopolist chooses the level of output where marginal cost equals marginal revenue the price:
A) equals marginal revenue.
B) equals average revenue.
C) is lower than average revenue.
D) is lower than marginal revenue.
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Chapter 15: Monopolistic Competition and Oligopoly
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) In practice,monopolistically competitive markets are:
A) very rare.
B) very common.
C) virtually nonexistent.
D) the only type of market that truly exists.
Q2) The outcome of a colluding oligopoly:
A) is more efficient than that of a monopolist.
B) is the same as that of a monopolist.
C) is less efficient than that of a monopolist.
D) is more efficient than that of a competitive oligopoly.
Q3) Offering goods that are similar to competitors' products but more attractive in some ways is called:
A) product distinction.
B) product differentiation.
C) price-point pinning.
D) deceptive advertising.
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Chapter 16: The Factors of Production
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) Minimum wages are:
A) not very controversial.
B) always needed to guarantee workers an acceptable standard of living.
C) a form of government interference in the free market.
D) only enforceable at the federal level.
Q2) Farming in poor countries is considered to be ___________ intensive because __________.
A) labor; labor is typically relatively cheaper than machinery in poor countries
B) capital; the labor used is concentrated, spread thinly across a lot of capital
C) labor; the tools in poor countries are more plentiful than the people
D) capital; the tools in poor countries are relatively cheaper than the cost of using people in poor countries
Q3) Which of the following would not be considered a "leisure" activity by economists?
A) Making dinner
B) Going skiing
C) Cleaning the bathroom floor
D) Making a work call.
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18
Chapter 17: International Trade
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141 Flashcards
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Sample Questions
Q1) The problem of inconsistent standards across nations can be managed by:
A) policymakers making explicit laws about imports for specific countries.
B) consumers making voluntary purchasing decisions.
C) policymakers making blanket standards imposed on all imports.
D) All of these are true.
Q2) Both countries can benefit from trade when:
A) at least one country produces the good for which it has an absolute advantage.
B) each specializes in producing the good for which it has a comparative advantage.
C) each specializes in producing the good for which it has an absolute advantage.
D) there are no trade barriers that are erected by either country.
Q3) Exports are goods and services that are produced:
A) in other countries and consumed domestically.
B) domestically and consumed in other countries.
C) and consumed in other countries.
D) and consumers domestically.
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19
Chapter 18: Externalities
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Sample Questions
Q1) If a production process involved the creation of a negative externality,then the social cost of production would be:
A) larger than the private cost of production.
B) the same as the private cost of production.
C) smaller than the private cost of production.
D) zero.
Q2) An example of a Pigovian tax would be a tax on:
A) income.
B) cigarettes.
C) corporate capital gains.
D) All of these are examples.
Q3) A sin tax is an example of:
A) a Pigovian tax.
B) government policy increasing total surplus in a market.
C) a tax that increases the efficiency of a market.
D) All of these statements are true.
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Chapter 19: Public Goods and Common Resources
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Sample Questions
Q1) Like negative externalities,tradable permits are useful in allocating common resources because:
A) the depletion of common resources imposes a negative externality.
B) the problem present in both is overconsumption.
C) the socially optimal quantity is not the same as the individual consumers in either case.
D) All of these statements are true.
Q2) Which of the following is likely to cause market failure and be undersupplied?
A) Research
B) Orange juice
C) River water
D) Grazing pasture
Q3) The costs involved with breaking a ban placed on a good depend on all of these except the:
A) punishment associated with rule breaking.
B) likelihood of being caught.
C) likelihood of being punished if caught.
D) ability of the public or individuals to pay for those costs.
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21
Chapter 20: Taxation and the Public Budget
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156 Flashcards
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Sample Questions
Q1) A proportional tax:
A) takes the same percentage of taxes from income from all taxpayers.
B) requires those with low incomes to pay a smaller percentage of their income than high-income people.
C) is levied so that low-income taxpayers pay a greater proportion of their income toward taxes than high-income taxpayers.
D) taxes everyone the same amount, regardless of their income.
Q2) If Janice earns $50,000 a year and pays $500 in taxes,and Cam earns $100,000 a year and pays $20,000 in taxes,then Janice's effective tax rate is _____ and Cam's effective tax rate is____.
A) 2%, 20%.
B) 5%, 20%.
C) 5%, 10%.
D) 10%, 10%.
Q3) In general,the most efficient taxes:
A) are often not the most equitable.
B) are often the most equitable.
C) raise the most revenues.
D) do not raise the most revenues.
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Page 22
Chapter 21: Poverty, Inequality, and Discrimination
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Sample Questions
Q1) An example of a social insurance program offered in the United States is:
A) Police and Firefighters.
B) Social Security.
C) Progressive taxation.
D) All of these are examples of social insurance programs.
Q2) Programs that provide goods or services,rather than cash,directly to needy individuals or households are called:
A) social insurance.
B) in-kind transfers.
C) economic growth.
D) conditional cash transfers.
Q3) An effective program used to fight transient poverty is:
A) unemployment insurance.
B) health insurance.
C) job training.
D) All of these are effective at fighting transient poverty.
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Chapter 22: Political Choices
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104 Flashcards
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Sample Questions
Q1) The median-voter theorem suggests that:
A) politicians maximize their votes by taking the policy position preferred by the median voter, under certain conditions.
B) Politicians always receive more votes in general elections when they appeal to extremists in their party.
C) the middle voter is generally influenced by the side they have more information on concerning an issue.
D) voters tend to vote with a "mob-mentality," all voting the same.
Q2) Many countries use a proportional-representation system,which means that:
A) if a party gains a certain percentage of the popular vote, then they are awarded the same percentage of representative seats in the government.
B) smaller parties can carve out niches and still have political influence.
C) everyone's preference gets represented proportionately with everyone else's.
D) All of these are true.
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24
Chapter 23: Public Policy and Choice Architecture
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Sample Questions
Q1) The Save More Tomorrow (SMarT)program found all of the following except that:
A) people want to save more than they typically do.
B) participants quadrupled their savings in just a couple of years.
C) if the default choice is to save a portion of income, people will save more.
D) people were already saving at an optimal amount, so the program had no effect.
Q2) Suppose studies showed that 12 percent of all teens choose to participate in underage drinking.If policymakers wish to reduce the amount of underage drinking,they should:
A) not share that statistic, and let teens think that it's a huge problem with all teens.
B) Informing them will have no impact on their individual behavior.
C) let teens know that the great majority of teens currently do not drink.
D) The statistic is likely to influence their personal decision, but it is impossible to predict in what way without more information.
Q3) When considering choice architecture,a nudge:
A) is a gentle push in a particular direction.
B) does not take away any options.
C) allows anyone who wants to go in a different direction to do so.
D) All of these statements are true.
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