Multiple Choice Quiz


1	The argument that education is like any other investment centers on the notion that
		A)	there are costs incurred early for a return to be gained later.
		B)	the economic wisdom depends on a present value calculation.
		C)	the value depends on a hefty government subsidy.
		D)	a) and b)


2	The word "free" in "free public schools" is inappropriate because
		A)	there are fees in some states to parents of K-12 students.
		B)	taxpayers must foot a sizable ($389 billion) bill.
		C)	parents must pay tuition for most public schools.
		D)	a) and b)


3	If education were not taxpayer supported then in evaluating whether or not to send their children to school parents would have to include in their thinking
		A)	the cost of the daycare alternative.
		B)	the present value of the benefits of the education.
		C)	the present value of the cost of tuition.
		D)	all of these


4	Economists argue that K-12 education has substantial "positive externalities." This means that
		A)	the children get more from an education than they appreciate at the time.
		B)	the parents of children get more from their child's education than they appreciate at the time.
		C)	there are costs to education that are really benefits.
		D)	more people than just the teacher, parent and student benefit from a child's education.


5	The positive externalities of public education include
		A)	the increased earnings of the child when they grow up.
		B)	the benefits to the child's parents in the form of a decreased likelihood the child moving back home when they are 20.
		C)	the happiness of the child when they grow up knowing the achieved something of value.
		D)	the increased social stability that exists because people are given an opportunity to succeed.


6	When modeling positive externalities the ______ curve is too ______, thereby not accurately reflecting social benefits, because it ignores the benefits to others
		A)	demand; high
		B)	demand; low
		C)	supply; high
		D)	supply; low


7	When looking at the question of whether we get what we pay for on education, the facts are that we have spend more inflation-adjusted money per pupil than we used to, we have smaller class sizes than we used to, we have higher graduation rates than we used to and SAT scores are lower than they use to be. Economists caution that
		A)	part of the increased spending is on special education students.
		B)	there are more less-qualified students taking the SAT than before.
		C)	many "High School graduates" got their diploma through a GED.
		D)	all of these


8	The economic literature on school spending suggests that
		A)	we are on the flat of the education cost function.
		B)	we are on the flat of the education production function.
		C)	more spending means more academic success now; always has and always will.
		D)	properly accounting for spending, we spend less every year.


9	The economic considerations necessary to calculate the wisdom of getting a college education include
		A)	the present value of tuition costs.
		B)	the present value of lost earnings while in college.
		C)	the present value of raised earnings after college.
		D)	all of these


10	The cost of educating a college student is higher than the cost of educating a high school student because
		A)	college faculty teach less and do more research than high school teachers.
		B)	high school teachers have more training in teaching.
		C)	while the total college bill (including room and board) is higher, tuition to college is lower than the cost of teaching a high school student.
		D)	college faculty are more likely to be unionized that high school teachers.

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