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35 Cards in this Set
- Front
- Back
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Explain the arguments for the vocher program.
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Increased competition
chance to escape a failing school Lack of competition creases low-qualitiy producers |
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Explain the arugments against the vocher program.
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Because most of the time one would have to move schools, only the child who's parents who are willing to put in the extra effort will be able to attend.
Create social segregation State funds will be provided to parochial schools. |
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Discuss the crisis in K-12.
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The U.S. spends more per student than any other country, but as a whole the students do not preform as well as their peers in other countries.
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How would a purely private market work for K-12?
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Only those who could afford it would be able to recieve education.
Supply curve would stay constant. |
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What are external benefits of K-12?
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Economic Growth
Improved Democratic Process More Civil Society Reduction of Crime Improved Health-Public Health Increased Charitable Giving General Improved Quality of Life for Everyone. |
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When does a market failure happen in private education?
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When MSC doesn't equal MSB.
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How does the externalities of education influence who should pay for it?
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Becuase the benefit is to society as a whole, society should pay for it, using government spending.
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How might tuition subsidies be used to cause a purely private system of K-12 to produce the socially optimal enrollment level?
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Using the subsidies, tution will decrease allowing it to be easier to enroll in schools causing the optimal enrollment level to be achieved.
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Discuss "Class size matters little to student achievement."
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Studies have shown that if class size is reduced in younger grades in low-income families then the result is positive. However, studies didn't find that the reduced class size helped the grades of older students.
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Discuss "Because of the extensive externalities arising from K-12, government production of K-12 is economically called for."
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False. Externalities call for the need of government funding not provision.
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What effect if any would increasing teachers pay have on reform of K-12?
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Increasing teachers pay will attract better teachers to the field however, this wouldn't happen over night and the outcomes would happen over a period of time.
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If the governement chose to invest an additional $100 in eduation, where should it be placed to make education more successful?
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Reduce class sizes in lower grades and giving a disproportionate share to schools in the state's poorer areas.
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"You cannot correct the problems of K-12 in the U>S. by simply 'throwing money' at schools."
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Because most of the probelm is at home, by giving the schools more money the home life will not change.
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If a district decides to reduce class sizes, why would it likely be required that teacher's salaries be raised?
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By having smaller classes, the demand for teachers increases.With an increase in demand, an increase in price (salary) will occur.
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What is the difference between "absolute poverty" and "relative proverty"?
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Absolute-- Standard is set in terms of some absolute level of income.
Relative-- Wealth level compared to others around the individual. |
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What factors explain why some people earn very low incomes?
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Difference in Resource Ownership
Level of Resource Ownership Value of Resource to Others Resorce Utilizatoin-- how many hours do you work? Inheritance Real Property Luck Propensities to Accumulate Discrimination |
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Why did the old welfare system, AFDC, create a 'culture of poverty'?
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1. Increased support to single parent families who didn't work.
2. Benefits decreased as income increased 3. Created welfare dependency |
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How does the new welfare system, TANF, address some of the issues with the old welfare system?
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1. Time limit on benefits
2. Work is required 3. Penalty for two parent households was elementaed. |
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What are some of the problems with TANF?
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1. Can the economy absorb these new low-skilled workers?
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How does the Earned Income Tax Credit (EITC) help alleviate the probelms of poverty for low-income families?
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Reduces the federal income tax liability for low-wage workers.
Create an initive to work. |
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What is the negative income tax?
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Subsitdy given to those who don't have income.
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Compare/Contrast Earned Income Tax Credit and Negative Income Tax.
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Negative income tax is given to those with no income and the benefits decrease as income increases. The Earned Income Tax Credit is given to those who an income and gives an incintive for those who work to continue working.
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Are wage differentials a natural outcome of a market economy?
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Yes, those with skills in high demand or short supply will be rewarded with a higher income.
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Is there a discrimination against women in the work place?
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No, usually women work less hours than men, causing their sallary to be lowered.
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How does discrimination effect the economic outcome of a company?
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To discriminate means that an employer won't pick the person who would be most efficent at their job. This will cause the company money and a loss of output.
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If the average femal who works full time year around earns 8-% of the salary of her male counterpart, does this imply that there is a 20% discrimination gap?
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To answer this question, we would have to know if there are differences in:
Education Experience Occupational Choice Unionization. |
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What distinguishes private insurance from social insurace?
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Private insurance is a contract where an individual makes payments to an insureance provider.
Social insurance is a government program financed by tax revenue that guarantees financial benefits for events beyond an individual's control. |
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When should the government provide social insurance?
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Social insurance should be provided when the burden of the events is likely to fall on society.
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What is a fully-funded social insurance program?
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The premiums paid are invested in assets that generate enough return to pay the FUTURE obilgations of the insurance program.
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What is a pay-as-you-go social insurance program?
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When money is transfered from the working young gerneation to the retired older generation.
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How does the social security system create an economic incentie for early retirement?
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Those who retire early recieve more benefits than others. It also creates a disinsintive to work.
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Explain why Social security could have either a positive or a negative impact on personal savings.
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1. Retirement Effect-- incentive to save more in order to maintain a standard of living during retirement.
2. Bequest effect-- Incentive to save more to not be a burden on ones family. 3. Wealth Subsitituion Effect-- Social Security is part of ones wealth therefore there is a disincentive to save. |
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How does health insurance, private or social, create an excessive demand for health care?
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Health insurance lowers the MPC of health care which increase the consumption of it through the subsidy.
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What is a managed care plan?
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A health care plan in which the patient has a fixed fee regarless of the cost of the health care. This structure gives the provider an incentive to control costs as well as limit services.
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What is a fee-for-service plan?
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The Provider is paid for each healthcare serivce delivered which creates an incentive to provide excessive services such as additional testing.
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