Test Bank for Managing the Public Sector, 9th Edition

Test Bank for Managing the Public Sector, 9th

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 Chapter Six:
Decision Making

Multiple-choice Questions:

1. The concept of bounded rationality and satisficing come from the work of
A. David Halberstam.
B. Peter F Drucker.
C. Herbert A. Simon.
D. Frederick C, Mosher.
E. Dwight Waldo.
(Answer: C)

2. A public manager faces the following set of conditions: problem is relatively uncertain
and complex and has potential for conflict; problem and its solution have important
personal and organizational consequences; there are significant but not immediate
deadline pressures; implementation will require widespread acceptance. Under these
conditions, the manager most likely would use
A. nominal group technique (NGT).
B. operations research (OR).
C. multi-objective model.
D. systems analysis.
E. cost-benefit analysis (CBA).
(Answer: A)

3. Altering variables in a model is an example of

A. simulation.
B. incrementalism.
C. sensitivity analysis.
D. the counterintuitive nature of systems.
E. the strategic factor.
(Answer: C)

4. Compared to operations research, systems analysis is

A. broader.
B. synonymous.
C. narrower.
D. antithetical.
E. usually more quantitative.
(Answer: A)
5. The four steps in systems analysis seldom occur in perfect sequence; therefore, the
system approach is highly
A. linear.
B. geometric.
C. integrated.
D. iterative.
E. isometric.
(Answer: D)

6. Which of the following tools is most likely to help public administrators cope with
uncertain futures?
A. Utility analysis
B. Decision trees
C. Linear programming models
D. Gantt charts
E. Differential equations
(Answer: B)

7. Which of the following best describes the changes in relative prices that occur as an
economy adjusts itself to the provision of public service?
A. Compliance costs
B. Externalities and spillovers
C. Tangible and real benefits
D. Pecuniary benefits and costs
E. Opportunity costs
(Answer: D)

8. Which of the following has NOT been identified by cognitive psychologists as a bias
in human decision making?
A. Lack of confidence
B. Seeing only one dimension of uncertainty
C. Giving too much weight to readily available or most recent information
D. Ignoring laws of randomness
E. Being reluctant to audit and improve decision making
(Answer: A)
9. A famous study of the location of military bases conducted by Albert Wohlstetter and
his associates at Rand illustrates
A. the heuristic value of the systems approach.
B. that many analysts apparently think that, if only enough factual research is
done, then somehow a valid generalization will emerge.
C. that Rand has never undertaken a major systems study where satisfactory
objectives could be defined.
D. that systems experts have made a great show of addressing totality but have
actually dealt with shreds and patches.
E. how method can supplant the problem.
(Answer: A)

Questions 10 and 11 refer to the artwork below.

Commitments
Permissibility

Information
Resources
E

Time
A B C D
factor no. 1

factor no. 2

factor no. 3
Strategic

Strategic

Strategic

10. In the drawing on the left, box E is best described as

A. a building block problem.
B. a unique problem.
C. a cosmetic solution.
D. a quick fix.
E. an opportunity.
(Answer: B)
11. In the drawing on the right, the unshaded rectangle in the middle is best described as
A. a graphic representation of the pressures decision makers face.
B. the zone of indifference.
C. the zone of feasibility.
D. type III decisions, which combine a top-down and bottom-up decisions.
E. systems analysis.
(Answer: C)

DISEASE A DISEASE B
EXPENDITURES LIVES SAVED EXPENDITURES LIVES SAVED
$100,000 100 $100,000 50
200,000 180 200,000 50
300,000 250 300,000 135
400,000 310 400,000 170
500,000 360 500,000 200
600,000 400 600,000 225
700,000 430 700,000 240
800,000 450 800,000 255
900,000 460 900,000 265
1,000,000 465 1,000,000 270

12. Given the table above, which of the following statements about how to spend $1
million in a cost-effective manner is correct?
A. Spend half on Disease A and half on Disease B.
B. Spend $700,000 on Disease A and $300,000 on Disease B.
C. Spend $400,000 on Disease A and $600,000 on Disease B.
D. Spend $400,000 on Disease B and $600,000 on Disease A.
E. $1 million should go to Disease A.
(Answer: D)

Questions 13 and 14 refer to the following two tables.

HYPOTHETICAL THREE-YEAR PROJECT

YEAR COSTS BENEFITS
1 $200 $0
2 100 200
3 0 200
$300 $400
 PRESENT VALUE OF $1
PERIODS
UNTIL
PAYMENT 1% 2% 4% 6% 8% 10% 12% 14% 15% 16% 18% 20% 22% 24%
1 0.990 0.980 0.962 0.943 0.926 0.909 0.89$ 0.877 0.870 0.862 0.847 0.833 0.820 0.80
2 0.980 0.961 0.925 0.890 0.857 0.826 0.797 0.769 0.756 0.74$ 0.718 0.694 0.672 0.65
3 0.971 0.942 0.889 0.840 0.794 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.551 0.52
4 0.961 0.924 0.855 0.792 0.735 0.68$ 0.636 0.592 0.572 0.552 0.516 0.482 0.451 0.42
5 0.951 0.906 0.822 0.747 0.681 0.621 0.567 0.519 0.497 0.476 0.437 0.402 0.370 0.34
6 0.942 0.888 0.790 0.705 0.630 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.303 0.27
7 0.933 0.871 0.760 0.665 0.583 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.249 0.22
8 0.923 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.204 0.17
9 0.914 0.837 0.703 0.592 0.500 0.424 0.361 0.308 0.284 0.263 0.225 0.194 0.167 0.14
10 0.905 0.820 0.676 0.558 0.463 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.137 0.11
11 0.896 0.804 0.650 0.527 0.429 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.112 0.09
12 0.887 0.788 0.625 0.497 0.397 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.092 0.07
13 0.879 0.773 0.601 0.469 0.368 0.290 0.229 0.182 0.163 0.145 0.116 0.093 0.075 0.06
14 0.870 0.758 0.577 0.442 0.340 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.062 0.04
15 0.861 0.743 0.555 0.417 0.315 0.239 0.183 0.140 0.123 0.108 0.084 0.065 0,051 0.04
16 0.853 0.728 0.534 0.394 0.292 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.042 0.03
17 0.844 0.714 0.513 0.371 0.270 0.198 0.146 0.108 0.093 0.080 0.060 0.045 0.034 0.02

13. Using the two tables above and a 12 percent discount rate, what would be the present
value of the projects net benefits (that is, benefits minus costs)?
A. $43.5 million
B. $301.8 million
C. $100 million
D. $400 million
E. $71.2 million
(Answer: A)

14. What would be the project’s approximate benefit to cost ratio?

A. 0.8
B. 0.95
C. 1.15
D. 1.33
E. Equal to or more than 2.00
(Answer: D)

15. Over a two-year period after Operation Cease-Fire began in Boston, not a single
juvenile in that city was killed by firearms. What concept does this project best illustrate?
A. Public-private cooperation
B. Incrementalism
C. Strategic factor
 D. Systems analysis
E. Multiobjective model
(Answer: C)

16. The value of what a resource could have produced had it been used in the best
alternative way is
A. fixed cost.
B. sunk cost.
C. variable cost.
D. opportunity cost.
E. pecuniary cost.
(Answer: D)

17. Sui generis problems are best defined as

A. problems associated with crises or life-threatening situations.
B. intractable problems that must be coped with rather than “solved.”
C. one-of-a-kind problems.
D. cyclical problems.
E. short-lived problems.
(Answer: C)

18. A ticket sold at a football stadium is a ticket not sold at a theater. This observation
illustrates what concept?
A. What goes around comes around
B. Pecuniary benefits
C. Say’s law
D. Exchange theory
E. Substitution effect
(Answer: B)

BEFORE AFTER
EXPERIMENTAL W X
CONTROL Y Z

19. In the table above, a program to increase reading scores is a success when
A. W minus X is greater than Y minus Z.
B. W minus X is less than Y minus Z.
C. X minus W is greater than Z minus Y.
D. X minus W is less than Z minus Y.
E. X is greater than W.
(Answer: C)

Essay and short answer questions:

Test Bank for Managing the Public Sector, 9th Edition

1. The first step in decision making is to identify the problem. Discuss some of the
difficulties this step entails.

2. Explain how the following pair of concepts might be helpful to an administrator

framing a decision: (a) upper and lower limits of a decision and (b)limiting or strategic
factors in decision making. Be specific.

3. Assume that you are going to do a cost-benefit analysis for an irrigation project (or
some other project that you have an interest in). Identify the major categories of costs
and benefits. Provide a specific examples of each.

4. Explain the importance of discounting in cost-benefit analysis.

5. How does cost-effectiveness analysis differ from cost-benefit analysis?

6. Given example of a multi-objective model that might help an administrator make a

decision.

7. List a few public sector decisions in which a decision tree might be helpful. Why?

8. What are the four basic steps in systems analysis?

9. Compare and contrast systems analysis to operations research.

10. Discuss the advantages and disadvantages of group decision making techniques.

11. Explain how the nominal group technique (NGT) works.

12. What are the four steps in program evaluation? Discuss some of the difficulties in
doing an evaluation of a government program.

13. What are some of the biases in human decision making that administrators should be
aware of?

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