MGRADES
ENCS 473 Midterm 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
What is a market failure? - CORRECT ANSWER - It refers to the inability of the market
to allocate resources efficiently up to the point where marginal social benefit equals marginal
social cost.
What happens when markets are not complete and costless in terms of goods and services? -
CORRECT ANSWER - it creates market failures, and inefficient production and
allocation of those goods and services
What are 5 different types of market failures? - CORRECT ANSWER - 1. missing or
incomplete markets
2. externalities
3. public goods are non rival and non-exclusive
4. incomplete/asymmetric information
5. unregulated monopoly
What is distributive justice? - CORRECT ANSWER - is fairness in the distribution of
environmental benefits and outcomes
What is Procedural justice? - CORRECT ANSWER - is the fairness in the processes that
resolve disputes and allocate resources
What is policy? - CORRECT ANSWER - - General term used to describe a formal
decision/plan of action adopted by an actor to achieve a particular goal
- course/principle action adopted or proposed by an organization/individual/government body
about how it intends to conduct business/make decisions to achieve outcomes or deliver services
, MGRADES
What is public policy? - CORRECT ANSWER - - the course of action the government
takes in response to an issue or problem
- is a formal decision or plan of action that has been taken by, or has involved, a state
organization
- is concerned with policies, process by which government makes/implements or avoid policies,
actions they take to promote those policies (policy instruments) and outcomes those policies
produce
Describe comprehensive rationality - CORRECT ANSWER - 1. Elected policy makers
translate their values into policy in a straight forward manner
2. they readily avail relevant knowledge
3. they have a clear, coherent and rank-ordered set of policy preferences that neutral
organizations carry out on their behalf
4. the policy process goes through clear-cut and ordered stages
5. this allows policy makers to maximize benefits to society the same way that an individual
maximizes their own utility
Describe bounded rationality - CORRECT ANSWER - 1. Policy makers have multiple,
often unclear, objectives which are difficult to rank
2. policy making organization have limited knowledge and research capacities and must use
shortcuts to gather a limited amount of info in a limited time
3. policy makers tend to consider a few policy choices, most of which divert incrementally from
the status quo
ENCS 473 Midterm 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
What is a market failure? - CORRECT ANSWER - It refers to the inability of the market
to allocate resources efficiently up to the point where marginal social benefit equals marginal
social cost.
What happens when markets are not complete and costless in terms of goods and services? -
CORRECT ANSWER - it creates market failures, and inefficient production and
allocation of those goods and services
What are 5 different types of market failures? - CORRECT ANSWER - 1. missing or
incomplete markets
2. externalities
3. public goods are non rival and non-exclusive
4. incomplete/asymmetric information
5. unregulated monopoly
What is distributive justice? - CORRECT ANSWER - is fairness in the distribution of
environmental benefits and outcomes
What is Procedural justice? - CORRECT ANSWER - is the fairness in the processes that
resolve disputes and allocate resources
What is policy? - CORRECT ANSWER - - General term used to describe a formal
decision/plan of action adopted by an actor to achieve a particular goal
- course/principle action adopted or proposed by an organization/individual/government body
about how it intends to conduct business/make decisions to achieve outcomes or deliver services
, MGRADES
What is public policy? - CORRECT ANSWER - - the course of action the government
takes in response to an issue or problem
- is a formal decision or plan of action that has been taken by, or has involved, a state
organization
- is concerned with policies, process by which government makes/implements or avoid policies,
actions they take to promote those policies (policy instruments) and outcomes those policies
produce
Describe comprehensive rationality - CORRECT ANSWER - 1. Elected policy makers
translate their values into policy in a straight forward manner
2. they readily avail relevant knowledge
3. they have a clear, coherent and rank-ordered set of policy preferences that neutral
organizations carry out on their behalf
4. the policy process goes through clear-cut and ordered stages
5. this allows policy makers to maximize benefits to society the same way that an individual
maximizes their own utility
Describe bounded rationality - CORRECT ANSWER - 1. Policy makers have multiple,
often unclear, objectives which are difficult to rank
2. policy making organization have limited knowledge and research capacities and must use
shortcuts to gather a limited amount of info in a limited time
3. policy makers tend to consider a few policy choices, most of which divert incrementally from
the status quo
