The fact that positive externalities may exist in education is not enough to justify government involvement. To justify government involvement, it must be shown that _____. a. the effect of the externalities are large b. the externalities are inframarginal c. people do not internalize the externalities d. education is an investment good ANSWER b […]
Rank-order the following three gifts in terms of potentially providing the highest utility to the lowest: 1 ) A new video game; 2 ) A gift card to a video game store; 3 ) Cash. A) 1, 2, 3 B) 2, 3, 1 C) 3, 2, 1 D) 1, 3, 2 ANSWER C
Which of the following is not a negative externality? a. smog b. noise pollution c. substandard housing d. majority voting ANSWER d
Suppose a tax is implemented to fund low-income housing. Which principle of taxation is most appropriate as a guide to evaluating the tax? a. the benefit principle b. the ability-to-pay principle c. a combination of the benefit principle and the ability-to-pay principle d. the mobility principle ANSWER b
In the above figure, Graph D with Capital on the vertical axis and labor on the horizontal axis implies that A) the marginal product of labor is increasing as more labor is employed. B) the marginal product of labor is decreasing as more labor is employed. C) the capital and labor are perfect substitutes. D) […]
In which of the following cases does the benefit principle provide little guidance? a. The benefits of the program are spread throughout the population. b. Gasoline taxes are used to fund highways. c. It is difficult to identify the beneficiaries of government programs. d. In cases a and c. e. In none of the above […]
Empirical evidence seems to suggest that there is _____ between education and education. a. a strongly positive link b. a weakly positive link c. no link d. a weakly negative link ANSWER c
Political decisions will be _____ only if the decision was approved by _____. a. Pareto improvements; a unanimous vote b. in the public interest; a majority vote c. Pareto improvements; a majority vote d. undertaken; a unanimous vote ANSWER a
In year 2000 dollars, per pupil expenditures on education in the United States in 1940 was around _____. a. $500 b. $1000 c. $2000 d. $4000 ANSWER b
Which of the following is not a correct statement about individual and group preferences? a. Individuals have preferences b. Groups have preferences c. Individuals within groups have preferences d. Groups make collective decisions on behalf of their members ANSWER b
