Question 1

Jacob attends Greatland University.He is a full time student.Annually he pays $6,000 in tuition and fees, $8,000 for room and board, and $1,300 for books.He also estimates that because he has chosen to be a full time student he is giving up approximately $20,000 in income.He also gives up approximately $600 in interest to finance his education.Jacob's annual total cost of his education is

A)$14,000.
B)$15,300.
C)$35,300.
D)$35,900.

D

Accepted Answer

To calculate Jacob's annual total cost of education, we need to add up all the costs he incurs and also the opportunity cost of giving up income and interest.

Total cost = tuition and fees + room and board + books + opportunity cost

Total cost = $6,000 + $8,000 + $1,300 + $20,000 + $600

Total cost = $35,900

Therefore, the best choice is D ($35,900) as it correctly calculates the total cost of Jacob's education.

Question 2

Because positive externalities present benefits on third parties&#10;A)private marginal benefits and social marginal benefits need to be considered to determine an optimal level of output.&#10;B)social marginal benefits and social marginal costs need to be considered to determine an optimal level of output.&#10;C)private marginal costs and private marginal benefits need to be considered to determine an optimal level of output.&#10;D)social marginal costs and private marginal benefits need to be considered to determine an optimal level of output.

Accepted Answer

A

Question 3

In 1948 the highest level of educational attainment of the U.S.population was&#10;A)not a high school graduate.&#10;B)high school graduate.&#10;C)some college.&#10;D)four or more years of college.

Accepted Answer

In 1948, the most common level of educational attainment in the U.S. was not having graduated from high school. This reflects the educational landscape of the time, where fewer people completed secondary education or pursued higher education compared to today.

Question 4

As years of education is increased&#10;A)marginal benefit will increase.&#10;B)marginal benefit will decrease.&#10;C)marginal cost will increase.&#10;D)marginal cost will remain constant.

Accepted Answer

The answer of As years of education is increased&#10;A)marginal benefit...

Question 5

When a positive externality is present the market will produce&#10;A)an efficient amount and charge a fair price.&#10;B)too much product and charge a price greater than a fair market value price.&#10;C)too little product and charge less than a fair market value price.&#10;D)too little and charge more than a fair market value price.

Accepted Answer

When a positive externality is present, such as when a flu shot is received, the benefits go beyond just the individual receiving the shot. The entire community benefits from the reduced spread of disease. Since the market only considers the private benefits received by the individual, it will only produce the quantity at which the marginal private benefit equals the marginal cost, which is less than the socially optimal quantity where the marginal social benefit equals the marginal cost. As a result, the market will produce too little product and charge less than a fair market value price.

Question 6

Which of the following statements is true concerning marginal benefit and marginal cost of education?&#10;A)The marginal private benefit is less than the marginal private costs for the first few years of education.&#10;B)The marginal private benefit is equal to the marginal private costs for the first few years of education.&#10;C)The marginal private benefit is greater than the marginal private costs for the first few years of education.&#10;D)The marginal social benefit is greater than the marginal private costs for the first few years of education.

Accepted Answer

In general, the marginal private benefit of education (i.e., the additional benefit received by the individual from pursuing one more year of education) is greater than the marginal private cost (i.e., the additional cost incurred by the individual in pursuing one more year of education). This implies that individuals will typically choose to continue their education up to the point where their marginal benefit equals their marginal cost. However, in the early years of education (e.g., primary school), the marginal cost may be relatively low while the marginal benefit may be relatively high (e.g., learning basic skills that are essential for future learning). Therefore, choice C is the most accurate option.

Question 7

In 2008 the highest level of educational attainment of the U.S.population was&#10;A)not a high school graduate.&#10;B)high school graduate.&#10;C)some college.&#10;D)four or more years of college.

Accepted Answer

According to the Census Bureau, in 2008 the highest level of educational attainment of the U.S. population was four or more years of college. Only 28.5% of the population had achieved this level of education.

Question 8

_________________ are costs imposed on third parties.&#10;A)Positive externalities&#10;B)Negative externalities&#10;C)Positive private costs&#10;D)Positive private benefits

Accepted Answer

Negative externalities are the costs imposed on third parties who are not involved in the original transaction or decision-making. They are costs that are not captured by the producer or consumer, but are instead passed on to others in the form of pollution, congestion, noise, or other negative impacts. Positive externalities, on the other hand, are benefits that accrue to third parties, such as increased property values or reduced crime rates. Positive private costs and benefits, meanwhile, are costs and benefits that are internal to the decision-maker and are taken into account in their decision making.

Question 9

Which of the following is included in the cost of education?&#10;A)Direct costs such as books&#10;B)Opportunity costs&#10;C)Time&#10;D)Direct costs and opportunity costs

Accepted Answer

The cost of education includes both direct costs, such as books or tuition fees, and opportunity costs, such as the income that could have been earned if the student had chosen to work instead of pursuing an education. It also includes the time spent on studying and attending classes. Therefore, the best choice is D, which includes both direct and opportunity costs.

Question 10

Which of the following would be a result of a positive externality?&#10;A)Increased dependence on social welfare programs&#10;B)More political unrest&#10;C)Lower crime rates&#10;D)Lower voter participation rates

Accepted Answer

A positive externality is a benefit that is received by a third party who is not directly involved in a transaction. In this case, lower crime rates would be a result of a positive externality because it benefits not just the direct parties involved but also the community as a whole. The other options do not relate to positive externalities.

Question 11

Because of education society experiences a&#10;A)positive private cost.&#10;B)positive private benefit.&#10;C)positive externality.&#10;D)negative externality.

Accepted Answer

The answer of Because of education society experiences a&#10;A)positive private...

Question 12

When I benefit because you increase your education a ________________ exists in society.&#10;A)positive externality&#10;B)negative externality&#10;C)positive private cost&#10;D)positive private benefit

Accepted Answer

The answer of When I benefit because you increase your...

Question 13

As years of education is increased&#10;A)marginal benefit will increase.&#10;B)marginal benefit will decrease.&#10;C)marginal cost will decrease.&#10;D)marginal cost will remain constant.

Accepted Answer

The answer of As years of education is increased&#10;A)marginal benefit...

Question 14

The opportunity cost of education&#10;A)increases with the level of educational attainment.&#10;B)decreases with the level of educational attainment.&#10;C)is consistent with the level of educational attainment.&#10;D)does not appear to be related to the level of educational attainment.

Accepted Answer

The answer of The opportunity cost of education&#10;A)increases with the...

Question 15

The acquired skills and knowledge that make people more productive is&#10;A)brain capital.&#10;B)human labor.&#10;C)human capital.&#10;D)physical capital.

Accepted Answer

The answer of The acquired skills and knowledge that make...

Question 16

Which of the following statements is true concerning marginal benefit and marginal cost of education?&#10;A)The marginal private benefit is less than the marginal private costs for the 16th year of education.&#10;B)The marginal private benefit is equal to the marginal private costs for the16th year of education.&#10;C)The marginal private benefit is greater than the marginal private costs for the 16th year of education.&#10;D)The marginal social benefit is greater than the marginal private costs for the 16th year of education.

Accepted Answer

The answer of Which of the following statements is true...

Question 17

Which of the following statements is most accurate?&#10;A)Because of the increase in skills and knowledge demand for workers decrease due to costs.&#10;B)Because of the increase in skills and knowledge demand for workers decrease due to productivity.&#10;C)Because of the increase in skills and knowledge demand for workers increase due to costs.&#10;D)Because of the increase in skills and knowledge demand for workers increase due to productivity.

Accepted Answer

The answer of Which of the following statements is most...

Question 18

When a positive externality is present in an industry&#10;A)resources are overallocated.&#10;B)resources are underallocated.&#10;C)resources are efficiently allocated.&#10;D)there is insufficient information to determine.

Accepted Answer

The answer of When a positive externality is present in...

Question 19

____________________ are benefits received by third parties.&#10;A)Positive externalities&#10;B)Negative externalities&#10;C)Positive private costs&#10;D)Positive private benefits

Accepted Answer

The answer of ____________________ are benefits received by third parties.&#10;A)Positive...

Question 20

The largest cost of attending college is&#10;A)tuition.&#10;B)tuition and books.&#10;C)room and board.&#10;D)foregone costs.

Accepted Answer

The answer of The largest cost of attending college is&#10;A)tuition.&#10;B)tuition...

Question 21

Societies will provide assistance and incentive to encourage people to increase education because&#10;A)the marginal cost of increasing educational attainment is less than the marginal benefit to society.&#10;B)the productive efficiency of education is limited to the level of private output.&#10;C)the optimal private level of educational attainment is lower than the socially optimal level of educational attainment.&#10;D)the level of external benefits is insufficient to cover the private benefits received.

Accepted Answer

The answer of Societies will provide assistance and incentive to...

Question 22

Research on school choice reform programs&#10;A)has been inconsistent in their results.&#10;B)has found little results that the programs generated systematic academic benefits.&#10;C)has found improved students' test scores.&#10;D)has found increased parental involvement.

Accepted Answer

The answer of Research on school choice reform programs&#10;A)has been...

Question 23

As years of education are increased&#10;A)external benefits increase.&#10;B)external benefits decrease.&#10;C)external benefits remain constant.&#10;D)the rate of change for external benefits increases after attainment of high school.

Accepted Answer

The answer of As years of education are increased&#10;A)external benefits...

Question 24

An educational reform program that allows parents a choice about where their children attend schools are known as&#10;A)private schools.&#10;B)charter schools.&#10;C)voucher schools.&#10;D)segregated schools.

Accepted Answer

The answer of An educational reform program that allows parents...

Question 25

Governments allocate large budgets to education at K-12 and university levels because _________________ and to ___________________.&#10;A)education generates positive externalities for society; increase people's incentives to obtain more education.&#10;B)education generates negative externalities for society; increase willingness to pay for education.&#10;C)resources are overallocated; create more efficiency in the market.&#10;D)education is a private good; provide easier access to education.

Accepted Answer

The answer of Governments allocate large budgets to education at...

Question 26

Spending per student in the U.S.has ______________ over the last 50 years.&#10;A)grown slowly.&#10;B)not exhibited any growth.&#10;C)grown rapidly.&#10;D)experienced inconsistent rates of growth.

Accepted Answer

The answer of Spending per student in the U.S.has ______________...

Question 27

Economic research indicates that average teacher quality has fallen since the 1970s.Part of this decline can be attributed to&#10;A)alternative, better paying options available.&#10;B)selectivity of educational programs limiting entrance.&#10;C)the falling number of program completions.&#10;D)economic downturn causing fewer openings.

Accepted Answer

The answer of Economic research indicates that average teacher quality...

Question 28

Marginal benefits received only by the individual decision maker are&#10;A)marginal benefits.&#10;B)private marginal benefits.&#10;C)social marginal benefits.&#10;D)external benefits.

Accepted Answer

The answer of Marginal benefits received only by the individual...

Question 29

Educational reform programs place an emphasis on the value of ____________ in providing incentives for teachers and administrators to be as productive as possible with their means.&#10;A)private businesses.&#10;B)integration.&#10;C)competition.&#10;D)seclusion.

Accepted Answer

The answer of Educational reform programs place an emphasis on...

Question 30

The U.S.educational system is widely criticized because of&#10;A)the political debate among administration.&#10;B)the diversity of students and levels of abilities.&#10;C)the lack of parental involvement.&#10;D)the increased spending has not seemed to generate better educational outcomes.

Accepted Answer

The answer of The U.S.educational system is widely criticized because...

Question 31

Mathematically the amount of the marginal benefit to society is A)external benefits minus private marginal benefits. B)private marginal benefits minus external benefits. C)private marginal benefits plus external benefits. D)Marginal benefits minus external benefits)².

Accepted Answer

The answer of Mathematically the amount of the marginal benefit...

Deck 17: The Economics of Education