PUBLIC AFFAIRS 2110 EXAM #4 SOLVED AND APPROVED
SOLUTIONS
Policy Analysis - correct answer a social and political activity that defines policy
problems, rationally analyzes policy alternatives and makes policy recommendations
Policy-Relevant Knowledge - correct answer Having to choose among competing
values such as health, wealth, security, peace, justice, equality, and freedom
Methodology - correct answer a system of standards, rules and procedures for creating,
critically assessing, and communicating policy-relevant knowledge
Policy Models - correct answer simplified representations of selected aspects of a
problem situation constructed for specific purposes
Type III Error - correct answer solving the wrong problem
Program Evaluation - correct answer carefully collecting information about a program in
order to make necessary decisions about the program
Benefit Cost Analysis (Cost Benefit Analysis) - correct answer an applied branch of
economics that attempts to assess service programs by determining whether the total
societal welfare has increased because of the program
Marginal Benefit - correct answer incremental benefit of that one unit of output
Indirect Costs - correct answer indirect costs are byproducts, multipliers, spillovers, or
investment effects
Direct Costs - correct answer direct costs are costs closely related to the primary
objectives of the project
Market Failure - correct answer inefficiency in allocation of goods and services in the
market
Reasons for Market Failure - correct answer time inconsistent preferences, information
asymmetries, non-competitive markets, principal-agent problems, externalities, public
goods
Government Failure - correct answer imperfection in government performance and the
inefficiency in allocation of goods and services lead to by government interventions
Criteria for Policy Recommendation - correct answer Effectiveness, Efficiency,
Adequacy, Equity, Responsiveness, Appropriateness
SOLUTIONS
Policy Analysis - correct answer a social and political activity that defines policy
problems, rationally analyzes policy alternatives and makes policy recommendations
Policy-Relevant Knowledge - correct answer Having to choose among competing
values such as health, wealth, security, peace, justice, equality, and freedom
Methodology - correct answer a system of standards, rules and procedures for creating,
critically assessing, and communicating policy-relevant knowledge
Policy Models - correct answer simplified representations of selected aspects of a
problem situation constructed for specific purposes
Type III Error - correct answer solving the wrong problem
Program Evaluation - correct answer carefully collecting information about a program in
order to make necessary decisions about the program
Benefit Cost Analysis (Cost Benefit Analysis) - correct answer an applied branch of
economics that attempts to assess service programs by determining whether the total
societal welfare has increased because of the program
Marginal Benefit - correct answer incremental benefit of that one unit of output
Indirect Costs - correct answer indirect costs are byproducts, multipliers, spillovers, or
investment effects
Direct Costs - correct answer direct costs are costs closely related to the primary
objectives of the project
Market Failure - correct answer inefficiency in allocation of goods and services in the
market
Reasons for Market Failure - correct answer time inconsistent preferences, information
asymmetries, non-competitive markets, principal-agent problems, externalities, public
goods
Government Failure - correct answer imperfection in government performance and the
inefficiency in allocation of goods and services lead to by government interventions
Criteria for Policy Recommendation - correct answer Effectiveness, Efficiency,
Adequacy, Equity, Responsiveness, Appropriateness
