Which of the following are reasons for the increased centralization in school financing? a. The existence of diseconomies of scale in education. b. A desire by state education agencies to decentralize control. c. A desire to equalize funding across school districts. d. Increasing positive externalities from education as globalization increases. ANSWER c
The optimal size of a club that shares a public good _____. a. gets smaller if external costs decline b. gets larger if external costs decline c. gets smaller if congestion costs decline d. gets larger if congestion costs decline ANSWER d
A tax that takes a smaller percentage of an individual’s income as their income rises is called a _____. a. proportional tax b. progressive tax c. sumptuary tax d. regressive tax ANSWER d
Economic status tends to be passed on from one generation to the next _____. a. regardless of the monetary wealth that is transmitted from parents to children b. because of the monetary wealth that is transmitted from parents to children c. in nearly all societies d. a and c ANSWER d
The percentage of elementary and secondary educational expenditures financed by the federal government _____ between 1940 and 2000. a. increased from 5 to 10 percent b. increased from 2 to 7 percent c. stayed relatively constant around 5 percent d. increased from 3 to 13 percent ANSWER b
As conflicts between principles of taxation are normative in nature, _____. a. agreement is easily reached b. disagreement cannot easily be resolved c. the benefit principle should be the proper default d. the Pareto criteria should be used instead ANSWER b
The optimal collective decision rule _____. a. will be 100 percent if collective decision-making costs are high b. will be simple majority rule if external costs are extremely large c. has declining external costs as voting rule moves from unanimity d. is likely to be less than majority rule ANSWER c
The equity argument for government financing of education _____. a. is dependent upon the socialization argument b. does not imply government financing c. does not imply government production d. is dependent upon externalities being inframarginal ANSWER c
Joe’s indifference map for lobster and soda is shown in the above figure along with his budget line. Will Joe choose point a? Explain your answer in terms both of MRS and the level of utility. What will be an ideal response? ANSWER Joe will not choose point a. Since the slope of his […]
Since 1940 the percentage of elementary and secondary educational expenditures financed by local governments _____. a. declined by around 10 percentage points b. increased by around 10 percentage points c. increased by around 5 percentage points d. declined by around 15 percentage points ANSWER d
