1. According to your textbook, which of the following statements is true? A. Social equity can never increase economic efficiency. B. Social equity can sometimes increase economic efficiency. C. Absolute equity would assure everyone in a society a house, a job, and free health care. D. Public policy should avoid tradeoffs between equity and efficiency

2 In many ways, public policy can be compared to A. physics. B. engineering. C. human nature. D. medicine.

3. In any economic system, the allocation of resources is Pareto-efficient if it's A. possible to make one or more persons better off without making anyone else worse off. B. possible to deprive some people in order to assure the welfare of some other people. C. not possible to deprive any person of his or her private property. D. not possible to make any one person better off unless some other person is left worse off.

4. Which of the following statements is most accurate? A. Public policy amounts to the political decisions that reflect the will of the majority. B. Public policy is unrelated to moral and ethical principles. C. Public policy is unrelated to patterns of personal choice. D. Public policy amounts to the collective decisions we make and enforce as a society

5. The Coarse Theorem dictates that: A. The right will end up with the party who can achieve the largest input. B. If, for some reason, transaction costs were low, the parties may not be able to reach a socially efficient outcome. In such cases, the role of the public policy may be to impose a solution, or create laws and institutions that increase transaction costs so that the involved parties can reach an efficient solution. C. The secondary use of resource will be same regardless of which party originally owns the property right. This outcome will be socially efficient because it creates the most value from the disputed resource. D. Private properties can deal with positive or negative externalities as long as the property rights are clearly defined.

6. If you choose to adopt one of the most powerful tools for changing people's behavior, you'll probably focus on making changes in A. human nature. B. the market system. C. human capital. D. incentives.

7. _______ economics examines the processes by which people make decisions. A. Contingency B. Behavioral C. Subjective D. Competitive

8. The 1996 legislation called TANF changed welfare in what significant way? A. Allowed only a sixty-month lifetime limit on federal welfare assistance B. Placed states in charge of deciding who would receive benefits C. Ended work requirements for welfare recipients D. Began cash entitlements for poor single parents with dependent children