Chapter 33
The Economics of K-12 Education
Multiple Choice
1. The form of capital through which education increases productivity is
A) physical capital.
B) human capital.
C) human principal.
D) brain capital.
2. In determining whether a further investment in education for a individual is worth the costs,
an economist would look at whether the sum of the
A) annual education costs is exceeded by the sum of annual income to the person.
B) annual education costs is exceeded by the sum of the increases in income that are
attributable to the increased education.
C) present value of the annual education costs is exceeded by the sum of the present value of
the annual income to the person.
D) present value of the annual education costs is exceeded by the sum of the present value of
the increases in income that are attributable to the increased education.
3. Though there is no tuition to public elementary and secondary schools, economists do not say
that it is free because
A) parents have to buy pencils and paper.
B) taxpayers pick up the tab for considerable costs of education.
C) parents have to help their kids learn.
D) teachers do not love to teach bad students.
4. The economic argument that it is in society’s best economic interest to pay for the education
of “someone else’s child” is the
A) positive marginal benefit argument.
B) positive externalities argument.
C) positive marginal cost argument.
D) moral obligation argument.
5. If a child is more apt to grow up to become a successful contributing member of society
because of an education, this benefit to society is called a
A) negative externality.
B) positive marginal private benefit.
C) positive externality.
D) positive marginal private cost.
6. In the presence of positive external benefits, the efficient price to charge parents for the
education of their children is
A) always zero.
B) greater than the market price.
C) always positive.
D) less than the market price.
7. In the presence of positive externalities, a market will charge ______ and produce _____.
A) the correct amount; the correct amount
B) too much; the correct amount
C) the correct amount; too little
D) too little; too little
8. The amount of money spent on K-12 education has _______ in dollar terms, ______ in real
terms and _______ in real dollars per student terms.
A) increased; decreased; decreased.
B) decreased; increased; decreased
C) increased; decreased; increased.
D) increased; increased; increased.
9. Since the 1960’s student-teacher ratios have ___________ from _____ to ______.
A) increased; 15; 26
B) decreased; 26; 15
C) decreased; 35; 15
D) decreased; 17; 15
10. SAT scores are ________ than they were in the 1960’s ___________ they were in 1980.
A) higher; and much higher than
B) lower; and much lower than
C) lower; but higher than
D) lower; but about the same as
11. Since 1960, high school graduation rates have
A) increased for whites but not for Hispanics and African Americans.
B) increase for African Americans and Hispanics but not for whites.
C) decreased across the board.
D) increased across the board, but proportionally more for African Americans.
12. Quick conclusions about the behavior of SAT scores should be made with care because
A) fewer, and on average more academically capable, people take the exam now than years
ago.
B) more, and on average more academically capable, people take the exam now than years
ago.
C) fewer, and on average less academically capable, people take the exam now than years
ago.
D) more, and on average less academically capable people, take the exam now than years
ago.
13. Quick conclusions about the behavior of real per student spending must be made with care
because
A) more money is spent on special education, and less is spent on everything else.
B) more money is spent on non-instructional needs, and less is spent on instruction.
C) less money is spent on special education and less is also spent on everything else.
D) though more money is spent per student, an increasing share goes to non-instructional
needs.
14. Quick conclusions about real per student spending should be made with care because
A) more money is spent on special education, and less is spent on everything else.
B) more money is spent on non-instructional spending, and less is spent on instructional
spending.
C) less money is spent on special education, and less is also spent on everything else.
D) more money is devoted education generally, but an increasing share is spent on special
education.
15. Quick conclusions about high school graduation rates should be made with care because
A) the significant increase in the granting of less valuable GED’s.
B) the phenomenon of social promotion.
C) the phenomenon of social promotion and the significant increase in the granting of less
valuable GED’s.
D) the decrease in reported graduation rates reflects more stringent graduation standards.
16. Social promotion suggests that students are
A) only allowed to proceed to the next grade if they meet minimum behavioral standards.
B) granted diplomas for survival, rather than for achievement.
C) only allowed to graduate after taking a state exam.
D) given an opportunity to go back and take courses to improve their grades.
17. The empirical evidence suggests that greater spending on public education in the 1980’s and
1990’s _____________ impact on education outcomes
A) had an enormous positive
B) had a small positive
C) had a perversely negative
D) had no significant
18. The empirical finding that increased spending has no significant impact on educational
outcomes
A) is absolutely inconsistent with the idea of an educational production function.
B) is consistent with the “steep part of the curve” on the educational production function.
C) is consistent with the “flat part of the curve” on the educational production function.
D) has been shown to be a lie propagated by the anti-public education movement.
19. In the analysis of educational spending on outcomes, it is generally the case that
A) only the spending devoted to raising teacher salaries matters.
B) only the spending on reducing class size matters.
C) spending on raising teacher salaries and reducing class size matters.
D) neither higher salaries nor reduced class size matters.
20. Most public school systems operate in a
A) purely private, monopolistic environment.
B) purely public, monopolistic environment.
C) purely private, perfectly competitive environment.
D) purely public, perfectly competitive environment.
21. Most public school teachers are
A) free agents, negotiating their salaries each year as individuals.
B) members of a union, with pay determined by a scale recognizing only teacher quality.
C) members of a union, with pay determined by a scale recognizing only length of service
and educational attainment.
D) members of a union, but must negotiate their pay as individuals.
22. Tenure for a public school teacher means that
A) they have taught at least ten years.
B) they have received a teaching award.
C) they can not be fired unless they commit a particularly onerous violation of the rules.
D) they are a member of the union.
23. It is generally _____ to fire a bad public school teacher ________.
A) easy, who has little interest in teaching any longer.
B) easy, who has tenure
C) impossible, who has committed a felony.
D) difficult, who has tenure.
24. The educational outcomes at private schools are generally _____ those in public schools.
A) the same as
B) better than
C) worse than
D) incomparable to
25. It is difficult to directly compare outcomes at private schools with those at public schools
because
A) private schools universally spend more per child than public schools.
B) private schools generally have children whose parents are more involved in their
children’s education.
C) private schools generally have teachers with more advanced degrees.
D) private schools are generally religious and religious students do not do as well.
26. It is difficult to directly compare outcomes at private schools with those at public schools
because
A) private schools universally spend more per child than public schools.
B) private schools generally have children whose parents earn more income and value
education.
C) private schools generally have teachers with more advanced degrees.
D) private schools are generally religious and religious students do not do as well.
27. School voucher programs
A) are universally hailed by teachers unions.
B) have not been tried in the United States.
C) have had modest success in some experimental locations.
D) have had students perform much worse than equally-situated students in public schools.
28. The academic ability of students studying to be teachers has
A) remained roughly the same in time.
B) increased markedly in recent years.
C) decreased markedly, particularly among men, in recent years.
D) decreased markedly, particularly among women, in recent years.
29. The academic ability of women studying to be teachers has declined in recent years because
A) bright women have other, more economically lucrative opportunities.
B) the rate of pay for female teachers is much less than for equally qualified male teachers.
C) the nominal rate of pay for all teachers has decreased.
D) of the increased outsourcing of teaching jobs.
30. In 2011, these states saw challenges to the collective bargaining rights of their teachers.
A) Wisconsin and Indiana
B) New York and California
C) Nevada and Texas
D) Alabama and Florida
31. In 2011, Wisconsin and Indiana state legislatures were focused on which of the following
costs of public education?
A) Material costs
B) Teacher salaries
C) Defined benefit pensions
D) Defined contribution pensions
32. A teacher’s pension is likely to be determined
A) by the number of years they taught and by a percentage of their last year’s salary.
B) a state legislature that can increase or decrease it at will.
C) the amount they contributed.
D) a state governor that can increase or decrease it at will.
33. A public teacher’s pension is likely to be
A) defined benefit.
B) defined contribution.
C) whatever they saved for themselves because they are not eligible for a pension or for
Social Security.
D) Social Security only.
34. Public teacher layoffs, in most states, would be
A) last in first out.
B) first in first out.
C) among the best teachers.
D) among the worst teachers.
35. In 2010, the U.S. spent ________ to educate _________ elementary and secondary school
students.
A) $223 million, 152 million
B) $440 billion, 152 million
C) $599 billion, 110 million
D) $660 billion, 55 million
36. The difference between the present value of all benefits and the present value of all costs is
the
A) “net present value” of an education.
B) current market value of knowledge.
C) subjective rate of return on an education.
D) external benefit from education.
37. As real interest rates increase, other things equal, the net present value of education is likely
to
A) increase.
B) remain unchanged.
C) decrease, possibly becoming negative.
D) decrease, but necessarily remain positive, since more knowledge is always a good thing.
38. Economists Lochner and Moretti have identified external benefits to education in the form of
A) improved melodies produced by better-educated musicians.
B) the higher quality of elected officials chosen by better-educated voters.
C) higher salaries earned by better-educated engineers.
D) education-related crime reductions.
39. Research by Eric Hanushek and others suggests that increasing the number or quality of
teachers will
A) reduce student test scores.
B) increase student test scores by ever-increasing amounts.
C) increase student test scores by ever-decreasing amounts.
D) foment unrest among unionized teachers and school administrators.
40. True or false? There is no good reason for K-12 education to be free.
A) True
B) False