1. A policy's objectives include?

a. Setting the target group

b. Social costs
c. Typically involves improving the well-being for society as a whole
d. Spillover and feedback effects

2. What is meant by the governance structure of a policy?

a. Involves identifying the decision makers and manager of a policy
b. Is only relevant in the case of a public good
c. Includes program eligibility requirements
d. Includes the nature of all regulations imposed on the benefits from a policy

3. Some policies seek to regulate behavior, however many target individual may fail to
change their behavior because:
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 Externalities distort the market; feedback
effects

4. An unintended consequence of a policy:

a. When a woman's role in family decision making triggers domestic violence
b. Increase sense of security/ decrease in vulnerability
c Increased school attendance
d. Increased woman's role in family decision making

5. Some policies only achieve their objectives indirectly through spillover effects for example:
a. A program provides loans to small business in the hopes that increased labor demand will
increase wages for unskilled labor
b. Agricultural research and extension programs who aim to increase the well-being of
adopting farmers
c. A resulting increase in food prices from a policy mean some poor become worse off as a
result of the policy
d. When a cash transfer program increases some Incomes of the non-poor.

6. The budgetary cost of a policy includes?

a. The currency value of any resources used in policy implementation
b. The currency value of any resources used in policy implementation, less any fees or taxes
collected
c. The social costs from a policy
d. Spillover and feedback effects

7. 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 from the policy
d. Negative externalities and does not include changes to the directly affected
8. The unitary households is referred so because:
a. there is one person in the household.
b. every household is exactly the same.
c. households follow a unitary distribution.
d. it treats an entire household as if it were a unitary decision maker, maximizing a
single utility function

TF GIẢI THÍCH

1. As we consume more of a good, utility will increase even if the good is subject
to diminSishing marginal utility
True. The statement is accurate because while the marginal utility of a good may decrease with each
additional unit consumed due to diminishing marginal utility, the total utility can still increase as long
as each additional unit provides positive utility. As long as the total utility is rising, consuming more of
the good contributes positively to overall satisfaction, even if at a diminishing rate.

2. According to the assumption of the basic consumer theory, if April consumes

more pizza, her marginal utility of consuming pizza is increasing
ô Thắng gt đúng rồi

3. The price of home time is the opportunity cost of time.

True. The statement is generally true. In economic terms, the opportunity cost of a decision
is the value of the next best alternative that must be forgone in order to pursue the chosen
option. When it comes to the concept of "home time" or leisure time, the price of that time is
considered its opportunity cost.

4. An increase in hourly wage will shift up the wage line and will lead to a
decrease in the quantity of low-skill labor demanded
True. An increase in the hourly wage will lead to a higher wage line on the labor
market graph, and due to the law of demand, it will generally result in a decrease in
the quantity of low-skill labor demanded. As the wage increases, employers are
typically willing to hire fewer units of low-skill labor, leading to a downward
movement along the labor demand curve.

An increase in the hourly wage shifts the wage line upward and, following the law of
demand, leads to a reduction in the quantity of low-skill labor demanded.

5. Wage labor households function simultaneously as both labor suppliers and

consumers.
The statement "Wage labor households function simultaneously as both labor suppliers and
consumers" is true. In an economic context, households earning their income primarily
through wage labor play two key roles:
- As labor suppliers: Members of these households offer their labor to the market in
exchange for wages. This is how they generate their income.
 - As consumers: The same households use the income they earn from their labor to
buy goods and services. This consumption is a vital part of the economy.

6. In the wage labor household model, if the household has more time available
(assuming food, nonfood and home time are normal goods), the labor supply
will increase

False. In the wage labor household model, with more time available (all else equal),
labor supply may decrease. This is because increased time for leisure/non-market
activities allows for greater utility, potentially outweighing the benefits of additional
income from extra work.
False. In the wage labor household model, if time is a normal good and the
household has more time available, the opportunity cost of time increases. This
would lead to a decrease in labor supply, as the household may choose to allocate
more time to non-market activities or leisure when the availability of time increases.

7. If a farm household's net market labor supply is positive, it means some

family labor is hired out through labor markets. ( Thắng Koy trả lời OK)
True. A positive net market labor supply indicates the household provides more
labor to the market than it receives. Since family labor is included in the calculation,
this excess must come from hiring out some family members.

8. In Nash bargaining models, any change in circumstance that increases the

wife’s fallback utility shifts the bargaining outcome in the favor of the wife.
True. In Nash bargaining models, any change that increases one party's fallback
utility strengthens their bargaining position. If the wife's fallback utility improves, it
shifts the bargaining outcome in her favor, as she now has a more attractive
alternative outside the negotiated agreement.

9. An institution is any set of formal rules and informal norms.

True. Because We define an institution as a set of formal rules and informal norms,
together with related enforcement mechanisms, that constrain peoples’ choices
regarding a particular set of actions.
False. In a two-player non-cooperative game where both players have dominant
strategies, there will be a unique Nash equilibrium. The dominant strategy
equilibrium is a specific type of Nash equilibrium where each player's dominant
strategy is played, and it is the only stable outcome in such a scenario.

True. While both players having dominant strategies implies they'll choose those
actions, the specific dominant actions might lead to multiple stable combinations
where neither wants to switch, forming multiple Nash equilibria. Imagine two
dominant choices that sometimes win against each other – choosing either could be
optimal depending on the other player's choice, creating multiple stable, no-deviation
points.

10. In a two-player non-cooperative game where both players have a dominant

strategy, there can be multiple Nash equilibria.
False. In a two-player non-cooperative game where both players have a dominant
strategy, there can be only one Nash equilibrium. This is because each player's
dominant strategy provides them with the best response, and the combination of
these best responses is the unique Nash equilibrium for the game.

11. In a common prisoner’s dilemma type game where participants decide

whether to cooperate or shirk their responsibility, there is often an incentive to
cooperate.
False. In a common prisoner's dilemma type game, participants often face a
dilemma where individually rational choices lead to a collectively suboptimal
outcome. The incentive is to shirk responsibility or defect, as it may provide a better
individual outcome even though mutual cooperation would lead to a better overall
result.

False. In a typical prisoner's dilemma, defecting always benefits a player more than
cooperating, regardless of the other's choice. This self-serving incentive, even under
the assumption others will defect, often leads to mutual defection, the worst outcome
for both. Cooperation, though beneficial for everyone, lacks individual incentive.

12. When choosing how much of an activity to undertake, a private decision-

maker assesses the marginal private benefit (MPB) and the marginal private
cost (MPC) of each additional unit, and chooses the quantity of activity at
which the private benefits outweigh the private costs
True. Rational private decision-makers will maximize their own utility, and this occurs
when MPB = MPC, meaning the last unit consumed provides just enough benefit to
justify its cost. They don't consider external benefits or costs others might incur.

13. When the social decision-maker perceives benefits to each unit of an

activity that the private decision maker does not (in addition to the benefits the
private decision maker perceives), the marginal social benefit (MSB) lies above
the marginal private benefit (MPB).
- True. Because when positive externalities are present, the marginal social
benefit (MSB) considers both the private benefits and the additional social
benefits . As a result, the MSB is higher than the marginal private benefit
(MPB), reflecting the broader societal impact of the activity.
 - True. The social decision-maker's awareness of additional benefits, like
positive externalities, adds them to the private benefit, pushing MSB above
MPB.

14. Positive externalities imply benefits enjoyed by others, that private actors
cannot appropriate, and result in a tendency for private actors to undertake
too much of the activity.
- False. Positive exter nalities mean others enjoy unpaid benefits, resulting in
private actors undertaking too little of the activity, not too much. Since they
don't capture the full benefit, they underproduce compared to the socially
optimal level.

15. The benefits a private decision-maker can appropriate are the benefits a
social planner assigns to a participant in a program.
- False. The benefits a private decision-maker can appropriate are generally the
private benefits specific to their individual participation in a program or
activity. Social planners, on the other hand, consider the broader societal
impacts, including both private and additional social benefits, when making
decisions about programs or activities.
- False. While there might be overlap, they're not identical. A social planner
considers total welfare, including externalities not enjoyed directly by
participants, while a private decision-maker only cares about their own
individual benefits. They capture different perspectives on value.

16. If food and nonfood are normal goods, then any additional dollar raises
food consumption expenditure, but by less than one dollar.
- False. If food and nonfood are normal goods, an additional dollar would lead
to an increase in both food and nonfood consumption expenditures. The
statement is inaccurate because normal goods, by definition, exhibit an
increase in consumption proportionate to the increase in income, and the
assertion that food consumption expenditure would rise by less than one
dollar is inconsistent with this characteristic of normal goods.

17. If a person initially supplies any labor, and if home time is a normal good,
then an increase in nonlabor income causes the person to reduce labor
supply.
- False. If home time is considered a normal good, an increase in nonlabor
income is expected to lead to an increase in the demand for home time, but
the effect on labor supply depends on the overall income and substitution
effects. In some cases, an increase in nonlabor income might lead to a
reduction in labor supply if the income effect dominates the substitution
effect, but it is not a universal rule, and the direction of the impact can vary
based on individual preferences and circumstances.
 - True. Here's why:
● Income effect: Increased non-labor income makes the person richer, leading
them to value leisure (home time) more, which is a normal good. They desire
more leisure and want to work less.
● Substitution effect: They might still find work attractive for its own sake
(wages, fulfillment). However, the income effect usually dominates, leading to
a reduced labor supply. So, they work less overall.

18. An increase in output price leads to a decrease in both the quantity of

supplied cloth and the quantity of the demanded low-skill labor.
- False. An increase in output price typically leads to an increase in the quantity
supplied of a good, not a decrease. Similarly, an increase in output price can
potentially increase the demand for factors of production, such as low-skill
labor, as producers may expand production in response to higher prices, not
decrease it.

19. Wage labor households are households functioning as labor suppliers.

True

Wage labor households are households with members who participate in wage labor
for businesses, organizations, or individuals. They provide labor to the economy,
helping to produce goods and services.Therefore, they are labor suppliers.

True. Wage labor households are households where members work for wages, and
in this context, they function as labor suppliers by providing their labor to employers
in exchange for monetary compensation.

20. Increases in food prices tend to reduce the purchasing power of nonfarm
business households.

True

Nonfarm households buy food with wages, not farm income. Food price hike eats
into those wages, leaving less to buy other things.

21. Rational individuals may choose not to cooperate, even when all parties
involved would benefit from cooperation.

True
Even if everyone wins with teamwork, sometimes it pays more to be selfish right
now. Rational people can choose against cooperation for their own immediate gain,
even if it hurts everyone later.

22. Good policy implementation choices require varying combinations of the

following key inputs: motivation, local information, and resources.

True
Good policy implementation is like baking a cake: you need the right mix of
motivation (passion!), local knowledge (the recipe!), and resources (ingredients and
oven!). Different policies need different amounts of each to turn out great.

23. A policy is only established by a government agency.

False
Policies can be established by various entities, not just government agencies. Non-
governmental organizations, international organizations, private companies, professional
associations, and community groups may all play a role in formulating and implementing
policies.

24. The directly affected groups of a policy are those who accept a policy’s
opportunities or do not change their behavior to comply with a policy’s
regulations.

False

The directly affected groups of a policy are those who experience its consequences,
whether positive or negative, regardless of their acceptance of opportunities or
compliance with regulations.