Deck 6: The Economics of Education: Crisis and Reform

Question 1

The Following Questions Refer to the graph below.
What is the equilibrium level of education in this market?

A)0 years
B)1 year
C)12 years
D)16 years
E)Between 12 and 16 years

Answer 1

C

Question 2

The Following Questions Refer to the graph below.
For which level of education is the family's MPB > MPC?

A)1 year
B)Between 0 and E₁ years
C)Between E₁ and E* years
D)Exactly E₁ years
E)Exactly E* years

Answer 2

B

Question 3

Which of the following best describes the U.S.K-12 educational system?

A)It is largely private
B)It is mainly private with some public education
C)It is about half public and half private
D)It is predominantly public
E)It is exclusively public

Answer 3

D

Question 4

Approximately what percent of its GDP does the United States spend on education?

A)2.0
B)3.0
C)3.9
D)4.2
E)5.3

Question 5

In 2003,approximately what percent of school aged children attended public schools?

A)90%
B)75%
C)50%
D)25%
E)10%

Question 6

The Following Questions Refer to the graph below.
What is this family's willingness to pay for a first year of education?

A)$0
B)$4,000
C)$6,000
D)$8,000
E)$10,000

Question 7

The Following Questions Refer to the graph below.
The socially optimal level of education

A)Is 0 years
B)Is 1 year
C)Is E₁ years
D)Is E* years.
E)Cannot be determined from the diagram.

Question 8

According to the Census Bureau,a college education adds how much to earnings over a person's work-life?

A)Nearly $1m
B)$2.1 m
C)$2.5m
D)$4.4 m
E)Over $5 m

Question 9

The Following Questions Refer to the graph below.
Which of the following is true for the first years of education?

A)MPB < MPC
B)MPB > MPC
C)MSB > MSC
D)MSB < MSC
E)MPB = MSB

Question 10

The Following Questions Refer to the graph below.
Which of the following is true for the 16th year of education?

A)MPB < MPC
B)MPB > MPC
C)MSB > MSC
D)MSB < MSC
E)MPB = MSB

Question 11

About how much does the United States spend on education,per pupil?

A)$6,000
B)$7,000
C)$8,000
D)$9,000
E)$10,000

Question 12

The Following Questions Refer to the graph below.
What assumption is shown by the fact that MPC = MSC on the graph?

A)This graph is for public education
B)There are no positive externalities associated with education
C)Education has positive spillover benefits for society
D)The market will produce the socially optimal quantity of education
E)This graph illustrates a private market for education

Question 13

Which of the following is an important difference between the United States and other countries in terms of their K-12 education system?

A)The United States spends less on education per pupil than most other countries
B)The United States spends a higher percentage of its GDP on education than other countries
C)The United States has a shorter school year than most other countries
D)The United States has a purely private market for education
E)All of the above

Question 14

According to the Census Bureau,someone with a professional degree can earn approximately how much during a typical work-life?

A)$1 m
B)$1.2 m
C)$2.5 m
D)$4.4 m
E)Over $5m

Question 15

The Following Questions Refer to the graph below.
What tuition would result in the family demanding 16 years of education?

A)$0
B)Less than $4,000
C)$4,000
D)$6,000
E)$10,000

Question 16

According to the Census Bureau,high school graduates can expect to earn how much during their working years?

A)$45,000
B)$1.2 m
C)$2.1 m
D)$2.5 m
E)$4.4 m

Question 17

The Following Questions Refer to the graph below.
The negative slope of the demand curve shows that

A)The marginal cost of education increases as more is purchased
B)The marginal benefit of education increases as more is purchased
C)The marginal benefit of each additional year of education decreases
D)There are positive spillover benefits of education
E)Tuition can be raised above T₁ dollars

Question 18

Where did U.S.eighth grade students rank internationally in terms of average math scores in 2007?

A)At the top
B)Second
C)Near the middle
D)Next to the bottom
E)At the bottom

Question 19

Where did U.S.eighth grade students rank internationally in terms of average science scores in 2007?

A)At the top
B)Second
C)In the middle
D)In the bottom half
E)At bottom

Question 20

Which of the following is true of the U.S.K-12 education system relative to the K-12 education system of other developed countries?

A)It has lower expenditures per pupil and lower achievement
B)It has lower expenditures per pupil and higher achievement
C)It has higher expenditures per pupil and lower achievement
D)It has higher expenditures per pupil and higher achievement
E)It has equivalent expenditures per pupil and achievement

Question 21

The Following Questions Refer to the graph below.
The slope of the supply curve indicates that the

A)Marginal cost of a year of education is constant
B)Marginal benefit of an additional year of education increases
C)Marginal benefit of an additional year of education is constant
D)Marginal benefit of an additional year of education increases
E)Cost of education is subsidized by the public

Question 22

The Following Questions Refer to the graph below.
In the diagram,the equilibrium level of education is

A)0 years
B)1 year
C)E₁ years
D)E* years
E)Between E₁ and E* years

Question 23

An increase in the demand for education will

A)Increase the supply of education
B)Decrease the equilibrium tuition
C)Decrease the equilibrium quantity of education
D)Increase the equilibrium quantity of education
E)Shift the demand curve for education to the left

Question 24

A decrease in the cost of education will

A)Increase the supply of education
B)Increase the equilibrium tuition
C)Decrease the equilibrium quantity of education
D)Increase the equilibrium quantity of education
E)Shift the demand curve for education to the left

Question 25

If the earnings expected from a college education increase,it will lead to an increase in

A)The demand for K-12 education
B)The supply of K-12 education
C)The cost of education
D)The teacher salaries
E)All of the above

Question 26

An increase in family income will

A)Increase the demand for education
B)Decrease the demand for education
C)Increase the quantity of education supplied
D)Increase the quantity of education demanded
E)Decrease the equilibrium level of tuition

Question 27

Which of the following is an example of a possible spillover benefit from education?

A)An improved democratic process
B)Improved health
C)Improved public safety
D)More charitable giving
E)All of the above

Question 28

I benefit because you become more educateD.This is an example of a

A)Negative externality in consumption
B)Spillover cost
C)Positive externality in production
D)Positive externality in consumption
E)Negative externality in production

Question 29

The Following Questions Refer to the graph below.
For which year of education is the family's MPB < MPC?

A)0 years
B)1 year
C)E₁ years
D)E* years
E)None of the above

Question 30

Which of the following will decrease the equilibrium quantity of education in a market?

A)An increase in the demand for education
B)A decrease in the demand for education
C)A decrease in production costs
D)An increase in the supply of education
E)None of the above

Question 31

Education is said to be which of the following?

A)Individually consumed
B)Individually produced
C)A semi-private good
D)A private good
E)A public good

Question 32

As the number of years of education increases,the spillover benefits will

A)Increase
B)Decrease
C)Stay the same
D)Become negative
E)None of the above

Question 33

The supply of private education is represented by

A)The MPB curve
B)The MPC curve
C)The MSC curve
D)The MSB curve
E)None of the above

Question 34

What happens to the marginal benefit of education as a child gets more schooling? It will

A)Increase
B)Decrease
C)Stay the same
D)Become infinite
E)Become negative

Question 35

Students learn about health and nutrition in school.This provides a

A)Positive externality in production
B)Positive externality in consumption
C)Negative externality in production
D)Negative externality in consumption
E)Cost to society

Question 36

An increase in the marginal benefit of education will cause which of the following?

A)The demand curve for education shifts right
B)The demand curve for education shifts left
C)The supply curve for education shifts right
D)The supply curve for education shifts left
E)The equilibrium number of years of education will decrease

Question 37

The creation of new learning technologies will cause which of the following to decrease?

A)The demand for education
B)The supply of education
C)The cost of education
D)The equilibrium quantity of education
E)The number of children in school

Question 38

Which of the following is a benefit of increased education?

A)Improved literacy
B)Increased earnings
C)Improved health
D)Greater satisfaction
E)All of the above

Question 39

Which of the following happens as tuition increases?

A)The demand for education increases
B)The demand for education decreases
C)The supply of education increases
D)The years of education demanded fall
E)The cost of education increases

Question 40

Marginal social benefits equal

A)MPB + spillover benefits
B)MPB - spillover benefits
C)MPCs
D)Total benefits + positive externalities in consumption
E)None of the above

Question 41

The Following Questions Refer to the graph below.
The socially optimal level of education is

A)0
B)Between 0 and E₁
C)E₁
D)E₂
E)E₃

Question 42

Educated citizens are more likely to be informed voters.This is an example of a

A)Positive externality in production
B)Positive externality in consumption
C)Negative externality in production
D)Negative externality in consumption
E)Cost to society.

Question 43

The current K-12 education system can be described as

A)Private
B)Centralized
C)Decentralized
D)State owned
E)None of the above

Question 44

Greater segregation along racial lines is a likely result of

A)Purely private K-12 education
B)No public K-12 education
C)Voucher programs
D)Tuition subsidies
E)All of the above

Question 45

In a purely private K-12 education system,spaces would be allocated based on

A)Ability
B)Equity
C)Income
D)Geographic boundaries
E)None of the above

Question 46

The Following Questions Refer to the graph below.
The market equilibrium level of education is

A)0
B)Between 0 and E₁
C)E₁
D)E₂
E)E₃

Question 47

With positive externalities in consumption,the market equilibrium quantity will be

A)Greater than socially optimal
B)Less than socially optimal
C)Equal to the socially optimal level
D)Higher than otherwise
E)None of the above

Question 48

The existence of spillover benefits results in an equilibrium quantity in the market that is socially optimal.

A)Higher than
B)Lower than
C)Equal to
D)Better than
E)More expansive than

Question 49

The Following Questions Refer to the graph below.
A tuition subsidy equal to how much will move the market to the socially optimal level of education?

A)T₃ - T₂
B)T₂ - T₁
C)T₃ - T₁
D)T1
E)T2

Question 50

The Following Questions Refer to the graph below.
A tuition subsidy of $6,000 would lead to

A)The socially optimal quantity of education
B)Greater than the socially optimal quantity of education
C)Less than the socially optimal quantity of education
D)More public education
E)A budget surplus

Question 51

In the existing public K-12 education system,spaces are allocated based on

A)Ability
B)Equity
C)Income
D)Geographic boundaries
E)None of the above

Question 52

A program to provide public funding for students in poor performing public schools to attend other schools is known as

A)A voucher program
B)A charter school
C)A tuition tax
D)A welfare program
E)Privatization

Question 53

To be socially optimal,education should be provided to the point where

A)MPB = MPC
B)MPB = MSC
C)MSB = MPC
D)MSB = MSC
E)MPB = MSB

Question 54

The Following Questions Refer to the graph below.
A tuition subsidy equal to T3 would result in which of the following?

A)The socially optimal quantity of education
B)Greater than the socially optimal quantity of education
C)Less than the socially optimal quantity of education
D)More public education
E)A budget surplus

Question 55

The Following Questions Refer to the graph below.
Which of the following government actions will move the market equilibrium to the socially optimal number of years of education?

A)A tax on education equal to $1,000
B)A tax on education equal to $3,000
C)A tuition subsidy equal to $1,000
D)A tuition subsidy equal to $3,000
E)Government provision of all education

Question 56

The argument for government provision of education hinges on the existence of

A)spillover costs.
B)spillover benefits.
C)voucher programs.
D)negative externalities in production.
E)negative externalities in consumption

Question 57

The Following Questions Refer to the graph below.
What is the equilibrium number of years of education the market will provide?

A)0
B)1
C)11
D)12
E)16

Question 58

Centralized planning leads to which of the following?

A)Limited consumer choice
B)Decreased quality
C)Increased prices
D)Lack of responsiveness
E)All of the above

Question 59

The Following Questions Refer to the graph below.
The socially optimal years of education is

A)1
B)Between 1 and 11
C)11
D)12
E)16

Question 60

A purely private K-12 system will lead to

A)Lower private costs
B)Increased public costs
C)Decreased racial segregation
D)Increased inequality
E)Greater social benefits

Question 61

Education could be considered a semi-private good,since

A)There are spillover benefits to other members of society resulting from the education of a child
B)Education of the population improves everyone's lives since it results in greater productivity and income for all members of society
C)There are benefits to society from education,since it reduces the crime rate
D)Education produces positive externalities to society
E)All of the above

Question 62

Improved education will lead to higher economic growth in a country.

Question 63

Decreasing average class size without changing teacher pay leads to

A)Lower quality teachers
B)A surplus of teachers
C)Lower costs per pupil
D)Increased segregation
E)All of the above

Question 64

What is the relationship between school funding and student achievement?

A)Positive
B)Negative
C)Mixed
D)Unrelated
E)Inverse

Question 65

If government wishes to increase the quantity of higher education consumed,what can be done to accomplish this?

A)Charge tuition that is below the full costs of providing the educational services
B)Operate public colleges
C)Provide reduced tuition to students
D)Any of the above alternatives would increase the consumption of education
E)The government should not attempt to increase education,since it is a private good

Question 66

Schools in which parents or other groups were permitted to create a new school with state funding and were given control over operations are known as

A)Private schools
B)Voucher schools
C)Magnet schools
D)Experimental schools
E)Charter schools

Question 67

A master's degree increases lifetime earnings over a bachelor's degree by $2.5m over high school graduates.

Question 68

What is the relationship between student achievement and teacher pay?

A)Positive
B)Negative
C)Mixed
D)Unrelated
E)Inverse

Question 69

Public schools must pay for which of the following expenses that private schools do not?

A)Transportation
B)Food
C)Special education
D)All of the above
E)None of the above

Question 70

Which of the following is an argument against voucher programs?

A)Cream skimming
B)Reduced social segregation
C)Decreased efficiency
D)Increased special education
E)All of the above

Question 71

More education will increase the revenue a worker adds to a firm.

Question 72

A college education does not improve earnings over a high school degreE.

Question 73

Studies of voucher programs indicate that the effects of vouchers on student achievement

A)Are small but have negative impact on student performance
B)Are received primarily by African-American and economically disadvantaged children
C)Have yet to be examined in large-scale programs
D)Both b and c
E)None of the above

Question 74

What is the relationship between teacher pay and a shortage of teachers?

A)Positive
B)Negative
C)Mixed
D)Unrelated
E)Direct

Question 75

Research on the effects of charter schools show

A)There are significantly positive impacts on student performance
B)There are significantly negative impacts on student performance
C)There are mixed results,with positive impacts in some schools and negative in others
D)Research has yet to be undertaken on these new types of schools
E)None of the above

Question 76

A reduction in class size should be undertaken as long as the marginal benefit of the decrease is

A)Positive
B)Negative
C)Greater than the marginal cost
D)Less than the marginal cost
E)Increasing

Question 77

The cream skimming argument says that the students who choose a voucher program will be

A)Higher income
B)Lower income
C)Higher achieving
D)Non-minority
E)None of the above

Question 78

Which of the following statements does not enjoy widespread agreement?

A)Achievement per dollar in U.S.education is too low
B)Reform of the U.S.education system is necessary to maintain high level human capital
C)Smaller class sizes can improve student performance
D)Voucher programs are the most effective way to improve the U.S.education system
E)Increased teacher pay increases teacher quality

Question 79

The empirical evidence of the effectiveness of voucher programs is best described as

A)Positive
B)Negative
C)Inconsistent
D)Substantial
E)Nonexistent

Question 80

American high school graduates outperform all other countries on math and science exams.