Question 1

Which of the following changes were introduced with the passage of the Affordable Care Act?

Accepted Answer

A)  increased government regulation of insurance markets and reduced reliance on private health insurance providers 
B)  introduction of new subsidies for the purchase of health insurance and expanded private health insurance through state exchanges 
C)  elimination of subsidies for the purchase of health insurance and new requirements that low-income individuals bear the full burden of insurance costs 
D)  expanded coverage by government and reduced reliance on private health insurance providers 
A)  increased government regulation of insurance markets and reduced reliance on private health insurance providers 
B)  introduction of new subsidies for the purchase of health insurance and expanded private health insurance through state exchanges 
C)  elimination of subsidies for the purchase of health insurance and new requirements that low-income individuals bear the full burden of insurance costs 
D)  expanded coverage by government and reduced reliance on private health insurance providers B

Question 2

National defense is a classic example of what economists call:

Accepted Answer

A)  a public good. 
B)  entitlement spending. 
C)  social insurance. 
D)  a private service. 
A)  a public good. 
B)  entitlement spending. 
C)  social insurance. 
D)  a private service. A

Question 3

The Medicare insurance program in the United States reimburses hospitals and doctors for providing health care services to the elderly.This is an example of:

Accepted Answer

A)  public financing of private provision. 
B)  restriction or mandate of private sale or purchase. 
C)  a tax. 
D)  a subsidy. 
A)  public financing of private provision. 
B)  restriction or mandate of private sale or purchase. 
C)  a tax. 
D)  a subsidy. A

Question 4

Suppose a consumer values a certain 19-inch television set at $150,and the seller is unwilling to sell the set for less than $200.These values imply that:

Accepted Answer

A)  it is efficient for the seller to charge a price of $0. 
B)  it is efficient for the seller to charge any price greater than $0 and less than $150. 
C)  it is efficient for the seller to charge any price greater than or equal to $150 and less than or equal to $200. 
D)  it is not efficient for a transaction to take place. 
A)  it is efficient for the seller to charge a price of $0. 
B)  it is efficient for the seller to charge any price greater than $0 and less than $150. 
C)  it is efficient for the seller to charge any price greater than or equal to $150 and less than or equal to $200. 
D)  it is not efficient for a transaction to take place.

Question 5

Suppose Juan values a slice of pizza at $1.50,but the pizza shop is unwilling to sell a slice of pizza for less than $2.00.These values imply that:

Accepted Answer

A)  it is efficient for the shop to sell a slice of pizza to Juan for $1.50. 
B)  it is efficient for the shop to sell a slice of pizza Juan for $2.00. 
C)  the shop needs to produce more efficiently in order to lower the price. 
D)  it is not efficient for the shop to sell a slice of pizza to Juan. 
A)  it is efficient for the shop to sell a slice of pizza to Juan for $1.50. 
B)  it is efficient for the shop to sell a slice of pizza Juan for $2.00. 
C)  the shop needs to produce more efficiently in order to lower the price. 
D)  it is not efficient for the shop to sell a slice of pizza to Juan.

Question 6

The goal of public economics,or public finance,is to answer which question?

Accepted Answer

A)  How might the government intervene in the economy and what are the likely effects? 
B)  Why do profit-maximizing firms attempt to set marginal revenue equal to marginal cost? 
C)  How are the terms of trade determined when countries choose to engage in international trade? 
D)  What are the goals and tools of macroeconomic policy? 
A)  How might the government intervene in the economy and what are the likely effects? 
B)  Why do profit-maximizing firms attempt to set marginal revenue equal to marginal cost? 
C)  How are the terms of trade determined when countries choose to engage in international trade? 
D)  What are the goals and tools of macroeconomic policy?

Question 7

Suppose someone says that a relatively small percentage of Americans own a large percentage of total assets and that therefore the government should redistribute wealth to those less fortunate.Which part of that statement is normative and which part is positive,if any? Explain.

Accepted Answer

Pointing out the facts about the income

Question 8

The goal of public finance is to:

Accepted Answer

A)  understand the proper role of corporations in the economy. 
B)  understand the proper role of the government in the economy. 
C)  determine the best way to increase government's role in the economy. 
D)  determine the best way to decrease government's role in the economy. 
A)  understand the proper role of corporations in the economy. 
B)  understand the proper role of the government in the economy. 
C)  determine the best way to increase government's role in the economy. 
D)  determine the best way to decrease government's role in the economy.

Question 9

Suppose the government taxes the rich to distribute money to the poor.Which of the following is an example of an efficiency loss?

Accepted Answer

A)  Rich people take home less of the money from their jobs because of the tax. 
B)  Rich people don't work as hard because of the tax. 
C)  Poor people are better off because of the redistribution. 
D)  Poor people work just as hard because they still need to make ends meet. 
A)  Rich people take home less of the money from their jobs because of the tax. 
B)  Rich people don't work as hard because of the tax. 
C)  Poor people are better off because of the redistribution. 
D)  Poor people work just as hard because they still need to make ends meet.

Question 10

Suppose that because the government increases the minimum wage,employees who were earning the minimum wage get a pay increase.This is an example of a(n):

Accepted Answer

A)  intended,direct effect. 
B)  intended,indirect effect. 
C)  unintended,direct effect. 
D)  unintended,indirect effect. 
A)  intended,direct effect. 
B)  intended,indirect effect. 
C)  unintended,direct effect. 
D)  unintended,indirect effect.

Question 11

Are all of the indirect effects of government intervention in the economy unintended effects? Explain.

Accepted Answer

In many cases,indirect effects of govern

Question 12

The government has passed many school accountability measures that reward schools if their students score highly on standardized tests.Suppose schools respond by more efficiently teaching their students.This outcome is an example of a(n):

Accepted Answer

A)  intended,direct effect. 
B)  intended,indirect effect. 
C)  unintended,direct effect. 
D)  unintended,indirect effect. 
A)  intended,direct effect. 
B)  intended,indirect effect. 
C)  unintended,direct effect. 
D)  unintended,indirect effect.

Question 13

Which type of government intervention can be used to lower the price for private sales or purchases of underproduced goods?

Accepted Answer

A)  public financing of private provision 
B)  restrictions or mandates of private sale or purchase 
C)  taxes 
D)  subsidies 
A)  public financing of private provision 
B)  restrictions or mandates of private sale or purchase 
C)  taxes 
D)  subsidies

Question 14

By 2010,approximately ________ of the nonelderly United States population did not have health insurance.

Accepted Answer

A)  5% 
B)  15% 
C)  18% 
D)  25% 
A)  5% 
B)  15% 
C)  18% 
D)  25%

Question 15

Suppose the White House could appoint the lead officials at the Congressional Budget Office (CBO).Do you think this change could affect the level of budget deficits? Explain.

Accepted Answer

It is possible that the analysts at the

Question 16

An intervention in which government establishes a federally funded health care service for everyone and pays doctors and medical practitioners directly is called:

Accepted Answer

A)  private provision with public financing. 
B)  restriction or mandate of private sale or purchase. 
C)  subsidy. 
D)  public provision. 
A)  private provision with public financing. 
B)  restriction or mandate of private sale or purchase. 
C)  subsidy. 
D)  public provision.

Question 17

Suppose a student values a textbook at $50,and the publisher is unwilling to sell the textbook at a price lower than $30.What price will lead to an efficient transaction between the student and publisher?

Accepted Answer

A)  a price of $0 
B)  any price greater than $0 and less than $30 
C)  any price greater than or equal to $30 and less than or equal to $50 
D)  any price greater than $50 
A)  a price of $0 
B)  any price greater than $0 and less than $30 
C)  any price greater than or equal to $30 and less than or equal to $50 
D)  any price greater than $50

Question 18

Public schools in the United States are operated by the government.This is an example of:

Accepted Answer

A)  public financing of private provision. 
B)  restriction or mandate of private sale or purchase. 
C)  a subsidy. 
D)  public provision. 
A)  public financing of private provision. 
B)  restriction or mandate of private sale or purchase. 
C)  a subsidy. 
D)  public provision.

Question 19

Social Security is the single largest government expenditure program; however,the system is projected to have insufficient funds to pay promised retiree benefits in less than 30 years.What is the main solution that liberals suggest to cope with this problem?

Accepted Answer

A)  raising the necessary resources through higher payroll taxes or some other means 
B)  encouraging individuals to save for their own retirement 
C)  encouraging inflow of young immigrants 
D)  enacting policies that bring higher birth rates 
A)  raising the necessary resources through higher payroll taxes or some other means 
B)  encouraging individuals to save for their own retirement 
C)  encouraging inflow of young immigrants 
D)  enacting policies that bring higher birth rates

Question 20

The government has passed many school accountability measures that reward schools if their students score highly on standardized tests.Suppose schools respond by manipulating the set of test-takers to increase average scores.This outcome is an example of a(n):

Accepted Answer

A)  intended effect. 
B)  direct effect. 
C)  indirect effect. 
D)  desired outcome. 
A)  intended effect. 
B)  direct effect. 
C)  indirect effect. 
D)  desired outcome.

Exam 1: Why Study Public Finance

Which of the following changes were introduced with the passage of the Affordable Care Act?

National defense is a classic example of what economists call:

The Medicare insurance program in the United States reimburses hospitals and doctors for providing health care services to the elderly.This is an example of:

Suppose a consumer values a certain 19-inch television set at $150,and the seller is unwilling to sell the set for less than $200.These values imply that:

Suppose Juan values a slice of pizza at $1.50,but the pizza shop is unwilling to sell a slice of pizza for less than $2.00.These values imply that:

The goal of public economics,or public finance,is to answer which question?

Suppose someone says that a relatively small percentage of Americans own a large percentage of total assets and that therefore the government should redistribute wealth to those less fortunate.Which part of that statement is normative and which part is positive,if any? Explain.

The goal of public finance is to:

Suppose the government taxes the rich to distribute money to the poor.Which of the following is an example of an efficiency loss?

Suppose that because the government increases the minimum wage,employees who were earning the minimum wage get a pay increase.This is an example of a(n):

Are all of the indirect effects of government intervention in the economy unintended effects? Explain.

The government has passed many school accountability measures that reward schools if their students score highly on standardized tests.Suppose schools respond by more efficiently teaching their students.This outcome is an example of a(n):

Which type of government intervention can be used to lower the price for private sales or purchases of underproduced goods?

By 2010,approximately ________ of the nonelderly United States population did not have health insurance.

Suppose the White House could appoint the lead officials at the Congressional Budget Office (CBO).Do you think this change could affect the level of budget deficits? Explain.

An intervention in which government establishes a federally funded health care service for everyone and pays doctors and medical practitioners directly is called:

Suppose a student values a textbook at $50,and the publisher is unwilling to sell the textbook at a price lower than $30.What price will lead to an efficient transaction between the student and publisher?

Public schools in the United States are operated by the government.This is an example of:

Social Security is the single largest government expenditure program; however,the system is projected to have insufficient funds to pay promised retiree benefits in less than 30 years.What is the main solution that liberals suggest to cope with this problem?

The government has passed many school accountability measures that reward schools if their students score highly on standardized tests.Suppose schools respond by manipulating the set of test-takers to increase average scores.This outcome is an example of a(n):

Theoretical Tools of Public Finance

Empirical Tools of Public Finance

Budget Analysis and Deficit Financing

Externalities- Problems and Solutions

Externalities in Action- Environmental and Health Externalities

Public Goods

Cost-Benefit Analysis

Political Economy

State and Local Government Expenditures

Education

Social Insurance- the New Function of Government

Social Security

Unemployment Insurance, disability Insurance, and Workers Compensation

Health Insurance I- Health Economics and Private Health Insurance

Health Insurance Ii- Medicare, medicaid, and Health Care Reform

Income Distribution and Welfare Programs

Taxation- How It Works and What It Means

The Equity Implications of Taxation- Tax Incidence

Taxes on Labor Supply

Taxes on Savings

Taxes on Risk Taking and Wealth

Taxation of Business Income

Fundamental Tax Reform and Consumption Tax

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