Study Guide:  Test #2

• In general you should know everything covered in lectures and in your text.
• You should also study the handouts from class presentations.
• You should also remember Okun's book
• A couple extra credit questions will come from he poverty & income  stats you collected as part of your homework (i.e, you should memorize them.)

More specifically, it may help to review these topics:

• Lindahl Prices
• Voting Paradox
• Median Voter Theorem
• Log Rolling 
• Arrow's Impossibility Theorem
• Economic analysis of politicians, public employees, & special interest groups.
• Define poverty line, poverty gap
• Reasons for redistributing income (e.g., Rawls, SWF, efficiency)
• TANF, AFDC,  SSI, etc.
• EITC
• In-kind transfers, efficiency of
• work incentives
• Welfare Reform
• Corporate welfare
• Social Security; reasons for having, its structure, winners & losers, effect on savings and work
• Trust Fund; reason for having, can it work?
• The real problem of retired baby boomers vs. the financial problems of social security.
• Unemployment Insurance
• Medicare
• Present Value Criteria
• IRR, B/C, uses and abuses
• Social Discount Rate
• Measuring Benefits and Costs
• Dealing with Intangibles
• Pitfalls (games) of cost-benefit analysis