1. What is the primary goal of public policy? - A) To regulate the economy - B) To promote social welfare - C) To ensure national security - D) To encourage technological innovation Answer: B) To promote social welfare Rationale: While public policy can serve various purposes, its primary goal is to address social issues and enhance the welfare of the public. 2. Which economic theory emphasizes the role of government intervention in correcting market failures? - A) Classical economics - B) Keynesian economics - C) Neoclassical economics - D) Austrian economics Answer: B) Keynesian economics Rationale: Keynesian economics advocates for government intervention to stabilize the economy and correct market failures. 3. What is a negative externality? - A) A benefit that affects a party who did not choose to incur that benefit - B) A cost incurred by a third party who has no control over the creation of that cost - C) The additional cost borne by producers in the production of a good - D) The additional revenue gained from selling a good Answer: B) A cost incurred by a third party who has no control over the creation of that cost Rationale: Negative externalities occur when the production or consumption of a good or service imposes a cost upon a third party. ... (Questions 4-14 would follow the same format, covering various topics such as fiscal policy, regulatory economics, competition policy, and the impact of public policy on market performance) 15. How does antitrust policy contribute to market performance? - A) By promoting monopolistic practices