A policy's direct effect includes_____.

A) The effects of a policy on third parties

B) Changes in market prices resulting from a policy

C) Changes in behavior in people directly affected by policy

D) Includes all of the effects from a policy including the spillovers

Some policies seek to regulate behavior, however many target individual may fail to change their behavior because__ or _____.

A) Poor monitoring or small penalties; they would have made the same choices with or without the policy.

B) Strong monitoring and large penalties; the policy is underfunded

C) Distance to the regulator; strong disincentives

D) Externalities distort the market; feedback effects

Policymakers are interested in the effects on the behavior, or choices, of those directly affected because__.

A) It can encourage socially desirable behavior

B) The behavioral responses may crowd out private market activities

C) It can create spillover and feedback affects

D) All of the above are reasons policymaker care about the behavior of those directly affected by the policy

The social cost of a policy includes___.

A) The currency value of any resources used in policy implementation

B) Any deterioration of well-being as a result of a policy

C) Explicit costs to the user form the policy

D) Negative externalities and does not include changes to the directly affected

How do policy analysts encourage and support good policy choices?

A) By illuminating the benefits and costs that are likely to emerge from any policy

B) By correctly predicting the best policy outcomes

C) By keeping costs as low as possible

D) By explaining only the most basic elements of a policy and ignoring any future changes in design to keep things simple and easy to understand