Chapter 34 – Education
Chapter 34 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.
Chapter 34 – Education
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. Suppose society were perfectly rational in determining the correct tuition subsidies for K-12
and college. Suppose further you observe that K-12 education is free and the college is not.
You should conclude that
A) there is a greater positive externality for college than there is for k-12 education.
B) there is a negative externality for k-12 education than there is for college.
C) there are greater private benefits to k-12 education than there is for college.
D) there are greater private benefits and fewer external benefits (in proportion) for college
than there are for k-12 education.
8. 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
9. 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.
Chapter 34 – Education
10. 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
11. 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
12. 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.
13. 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.
14. 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.
Chapter 34 – Education
15. 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.
16. 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.
17. 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.
18. 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
19. 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.
Chapter 34 – Education
20. 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.
21. 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.
22. 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.
23. 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.
24. 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.
Chapter 34 – Education
25. 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
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 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.
27. 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.
28. 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.
29. 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.
Chapter 34 – Education
30. 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.
31. 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
32. 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
33. 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.
34. 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.
Chapter 34 – Education
35. A 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.
36. Over the last 20 years, tuition, room and board at universities has
A) decreased.
B) decreased if you take account of inflation.
C) increased at about the same rate as overall inflation.
D) increased far faster than overall inflation.
37. A university education costs more per student than a high school education because
A) college professors teach less than high school teachers.
B) college professors earn more than high school teachers.
C) colleges are typically in a monopoly position.
D) college professors teach less and earn more than high school teachers.
38. Since 1960 the percentage of the population with a college degree has increased from __ to
__.
A) less than 10%; near 25%.
B) around 20%; near 85%.
C) less than 2%; near 50%.
D) near 40%; near 50%.
39. To a prospective fulltime college student, the cost of a college education reflects the cost of
A) tuition.
B) tuition and fees.
C) tuition, fees, books and supplies.
D) tuition, fees, books and supplies plus any income foregone while in school.
Chapter 34 – Education
40. To compare the costs of a college education with its monetary benefits, economists use the
concept of
A) actual costs and benefits.
B) present value.
C) enumerated costs and benefits.
D) plausible deniability.
41. In the United States, the average government subsidy for a college education at a public
institution is approximately __ for every $1 spent by the student.
A) $1
B) $2
C) $5
D) $10
42. In the United States, the average government subsidy for a college education at a private
institution is approximately __ for every $1 spent by the student.
A) $1
B) $2
C) $5
D) $10
43. Since the 1980s federal spending on higher education has taken the form of
A) direct payments to faculty.
B) a substantial shift toward grants rather than loans.
C) a substantial shift toward subsidized loans rather than grants.
D) direct payments to universities.
44. In the 1990s President Clinton worked for
A) the creation of the Pell Grant.
B) the GI Bill.
C) the introduction of student loans.
D) tax credits and deductions for education.
Chapter 34 – Education
45. Between 1992 and 2009, the percentage of college students receiving some form of aid
A) increased from 8% to 13%.
B) remained constant at 35%.
C) increased from 54% to 79.5%.
D) decreased from 73% to 58%.
46. Between 1992 and 2009, the percentage of college students receiving federally funded grants
A) increased from 8% to 13%.
B) slowly increased to 33%.
C) increased from 58% to 73%.
D) decreased from 73% to 58%.
47. In higher education, the last 20 years have seen
A) more students become eligible for some form of aid.
B) fewer students become eligible for some form of aid.
C) a higher level of aid focused on a smaller number of students.
D) a dramatic reduction in federal spending on all forms of aid.
48. Between 1992 and 2008, the percentage of students borrowing to pay for college
A) decreased from 18% to 13%.
B) remained constant at 30%.
C) increased from 31% to 53%.
D) decreased from 73% to 58%.
49. Between 1960 and 2008, inflation-adjusted spending per elementary and secondary school
student
A) decreased from $4,289 to $2,447.
B) increased from $2,606 to $4,289.
C) increased from $2,606 to $11,134.
D) increased from $9,910 to $15,750.
Chapter 34 – Education
50. 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) $650 billion, 55 million
51. In 2010, more than ________ was spent to educate _________ college students.
A) $223 million, 152 million
B) $315 billion, 52 million
C) $457 billion, 21 million
D) $561 billion, 8 million
52. In 2010, expenditure per student in higher education was approximately
A) $4,289.
B) $9,053.
C) $14,846.
D) $22,184.
53. Over the last 42 years, costs of college tuition, room and board have increased by
A) 32%.
B) 87%.
C) 137%.
D) 648%.
54. 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.
Chapter 34 – Education
55. In the 1980s, President Reagan shifted government education policies toward
A) repeal of the GI Bill.
B) increased availability of subsidized student loans.
C) education-related income tax deductions and credits.
D) increased reliance upon direct grants, such as Pell Grants.
56. 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.
57. 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.
58. 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.
True/False
59. There is no good reason for college to cost as much as it does.
A) True
B) False
60. There is no good reason for K-12 education to be free.
A) True
B) False