Question 1

Public choice is concerned with

Accepted Answer

A)  relative prices. 
B)  government decision making. 
C)  marketing techniques. 
D)  consumer surveying. 
A)  relative prices. 
B)  government decision making. 
C)  marketing techniques. 
D)  consumer surveying.

Question 2

A person will become informed on a political issue if

Accepted Answer

A)  it is considered an important issue to society at large. 
B)  he perceives the benefits of becoming informed as greater than the costs of becoming informed. 
C)  it is regularly discussed on television news shows. 
D)  it is regularly written about in the daily newspapers. 
E)  none of the above 
A)  it is considered an important issue to society at large. 
B)  he perceives the benefits of becoming informed as greater than the costs of becoming informed. 
C)  it is regularly discussed on television news shows. 
D)  it is regularly written about in the daily newspapers. 
E)  none of the above

Question 3

Special interest groups

Accepted Answer

A)  often gain from public policies that may not be in accord with the interests of the general public. 
B)  never gain from public policies that are not in accord with the interests of the general public. 
C)  always gain from public policies that are not in accord with the interests of the general public. 
D)  never lobby for public policies that are not in accord with the interests of the general public. 
E)  always lobby for public policies that are not in accord with the interests of the general public. 
A)  often gain from public policies that may not be in accord with the interests of the general public. 
B)  never gain from public policies that are not in accord with the interests of the general public. 
C)  always gain from public policies that are not in accord with the interests of the general public. 
D)  never lobby for public policies that are not in accord with the interests of the general public. 
E)  always lobby for public policies that are not in accord with the interests of the general public.

Question 4

Rent seeking is more likely to occur in a family when the parents make their inheritance plans clear by telling the children ahead of time that their estate will be divided equally among the children (and that under no circumstances will the parents change their minds)than when there is more uncertainty with regards to the parents' inheritance plans.

Accepted Answer

A) True 
 B)False

Question 5

Public choice theory predicts candidates will

Accepted Answer

A)  speak in specific instead of general terms. 
B)  modify their positions to become more like their opponent, if polls show they are not doing as well as their opponent. 
C)  call themselves right-wingers or left-wingers, not middle-of-the-roaders. 
D)  label their opponents as too middle-of-the-road. 
E)  all of the above 
A)  speak in specific instead of general terms. 
B)  modify their positions to become more like their opponent, if polls show they are not doing as well as their opponent. 
C)  call themselves right-wingers or left-wingers, not middle-of-the-roaders. 
D)  label their opponents as too middle-of-the-road. 
E)  all of the above

Question 6

Public choice deals with

Accepted Answer

A)  negative and positive externalities. 
B)  public-sector decision making. 
C)  how people choose between several mutually exclusive options. 
D)  bond, stock, and money markets. 
E)  none of the above 
A)  negative and positive externalities. 
B)  public-sector decision making. 
C)  how people choose between several mutually exclusive options. 
D)  bond, stock, and money markets. 
E)  none of the above

Question 7

Exhibit 32-3
  
-Refer to Exhibit 32-3.The exhibit shows the breakdown of benefits and costs for a five-person community considering whether to purchase a $5,000 statue of Adam Smith to put in the center of the public square.How will each of the five persons (from Milton to Kenneth,in order)vote?

Accepted Answer

A)  against; against; against; for; for 
B)  against; against; for; for; against 
C)  against; for; for; for; for 
D)  for; for; for; against; against 
E)  for; for; against; against; for 
A)  against; against; against; for; for 
B)  against; against; for; for; against 
C)  against; for; for; for; for 
D)  for; for; for; against; against 
E)  for; for; against; against; for

Question 8

Two candidates,Smith and Jones,are running for the same political office.Last night they were in a debate.It is generally accepted that Smith is perceived more to the left after the debate than before the debate.This is bad news for Jones if before the debate Smith was perceived

Accepted Answer

A)  too far right. 
B)  too far left. 
C)  as being in the middle of the political spectrum. 
D)  b or c 
E)  none of the above 
A)  too far right. 
B)  too far left. 
C)  as being in the middle of the political spectrum. 
D)  b or c 
E)  none of the above

Question 9

Which of the following persons is most likely to become informed on the National Endowment for the Arts?

Accepted Answer

A)  an attorney 
B)  a mayor of a city 
C)  a farmer 
D)  a student of agriculture 
E)  a sculptor 
A)  an attorney 
B)  a mayor of a city 
C)  a farmer 
D)  a student of agriculture 
E)  a sculptor

Question 10

The simple majority decision rule may generate results that are

Accepted Answer

A)  efficient, because the projects undertaken are the ones desired by more than 50 percent of the people. 
B)  efficient, because projects are undertaken only if total benefits exceed total costs. 
C)  efficient, because the intensity of individuals' preferences are considered. 
D)  inefficient when the total benefits of projects undertaken are less than the total costs. 
E)  inefficient when the intensity of individuals' preferences are considered. 
A)  efficient, because the projects undertaken are the ones desired by more than 50 percent of the people. 
B)  efficient, because projects are undertaken only if total benefits exceed total costs. 
C)  efficient, because the intensity of individuals' preferences are considered. 
D)  inefficient when the total benefits of projects undertaken are less than the total costs. 
E)  inefficient when the intensity of individuals' preferences are considered.

Question 11

Exhibit 32-1
  
-Refer to Exhibit 32-l.The exhibit shows the breakdown of benefits and costs for a four-person town of a proposed $1,200 addition in books to the public library.The members of the community get to vote on the project at hand,and the majority rules.Given the data,the $1,200 will

Accepted Answer

A)  be spent, even though the total benefits are less than the total costs. 
B)  not be spent, since more persons are against the project than are for it. 
C)  be spent, since the total benefits are greater than the total costs. 
D)  not be spent, since the total benefits are less than the total costs. 
A)  be spent, even though the total benefits are less than the total costs. 
B)  not be spent, since more persons are against the project than are for it. 
C)  be spent, since the total benefits are greater than the total costs. 
D)  not be spent, since the total benefits are less than the total costs.

Question 12

Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are

Accepted Answer

A)  rationally ignorant. 
B)  not acting in their own best interests. 
C)  members of special interest groups. 
D)  shortsighted. 
A)  rationally ignorant. 
B)  not acting in their own best interests. 
C)  members of special interest groups. 
D)  shortsighted.

Question 13

Political candidates in a two-person race prefer to be viewed as occupying the center of the political distribution because

Accepted Answer

A)  occupying the center is a sign of being a leader. 
B)  political candidates usually prefer to maintain the status quo and the center is the status quo. 
C)  the electorate is largely in the "wings" (extreme ends) of the political distribution. 
D)  whoever comes closer to the center usually wins the election. 
A)  occupying the center is a sign of being a leader. 
B)  political candidates usually prefer to maintain the status quo and the center is the status quo. 
C)  the electorate is largely in the "wings" (extreme ends) of the political distribution. 
D)  whoever comes closer to the center usually wins the election.

Question 14

Would we expect the "average" person to take more time to learn about the car he or she is considering purchasing or about the issues in the upcoming U.S.Senate race in his or her state?

Accepted Answer

A)  The Senate race, because it is critical that we elect the right people to government. 
B)  The car, but there is no rational reason for this. 
C)  The Senate race, because the person who is elected senator today may become president tomorrow. 
D)  The car, because a mistake here can potentially cause him or her more harm on a day-to-day basis; in addition, a person is unlikely to be able to determine the outcome of a Senate race. 
A)  The Senate race, because it is critical that we elect the right people to government. 
B)  The car, but there is no rational reason for this. 
C)  The Senate race, because the person who is elected senator today may become president tomorrow. 
D)  The car, because a mistake here can potentially cause him or her more harm on a day-to-day basis; in addition, a person is unlikely to be able to determine the outcome of a Senate race.

Question 15

Logrolling consists of

Accepted Answer

A)  exchanging votes to gain support for legislation. 
B)  spreading the costs of a piece of special interest legislation over many millions of people. 
C)  attempts directed at slowing down the growth of rational ignorance. 
D)  increasing taxes on some people and lowering taxes on other people. 
E)  none of the above 
A)  exchanging votes to gain support for legislation. 
B)  spreading the costs of a piece of special interest legislation over many millions of people. 
C)  attempts directed at slowing down the growth of rational ignorance. 
D)  increasing taxes on some people and lowering taxes on other people. 
E)  none of the above

Question 16

A candidate who understands that in a two-person race the person closer to the center of the voter distribution will win is likely to

Accepted Answer

A)  first take polls to figure out what the voters are thinking and then afterward propose policies that are consistent with the polls. 
B)  first put forth his or her views on a whole host of issues and then afterward take polls to see if the majority of voters agree with him. 
C)  speak in specific terms about what needs to be done. 
D)  a and c 
E)  b and c 
A)  first take polls to figure out what the voters are thinking and then afterward propose policies that are consistent with the polls. 
B)  first put forth his or her views on a whole host of issues and then afterward take polls to see if the majority of voters agree with him. 
C)  speak in specific terms about what needs to be done. 
D)  a and c 
E)  b and c

Question 17

The state of choosing not to acquire information because the costs of acquiring the information are greater than the benefits is referred to as

Accepted Answer

A)  logrolling. 
B)  rational ignorance. 
C)  market failure. 
D)  government failure. 
A)  logrolling. 
B)  rational ignorance. 
C)  market failure. 
D)  government failure.

Question 18

Which of the following statements is false?

Accepted Answer

A)  In some instances, simple majority voting leads to a project being undertaken even though the total costs of the project exceed the total benefits. 
B)  Simple majority voting fails to take into account the intensity of individuals' preferences. 
C)  Public choice economists often explain low voter turnouts in terms of the individual costs and benefits of voting. 
D)  If an individual will only vote if he or she feels that his or her vote will make a difference in the election, it is likely that he or she will vote. 
A)  In some instances, simple majority voting leads to a project being undertaken even though the total costs of the project exceed the total benefits. 
B)  Simple majority voting fails to take into account the intensity of individuals' preferences. 
C)  Public choice economists often explain low voter turnouts in terms of the individual costs and benefits of voting. 
D)  If an individual will only vote if he or she feels that his or her vote will make a difference in the election, it is likely that he or she will vote.

Question 19

A college professor berates his political science students for being uninformed on current political and government issues.For example,most of them do not know who represents them in the U.S.House of Representatives.He tells his students that they will never get very far in life by staying so uninformed and uninterested.The professor is probably overlooking the fact that

Accepted Answer

A)  people are uninformed and uninterested in only some things-not all things. 
B)  his students could be choosing rational ignorance. 
C)  by not taking out time to find out certain things, his students have more time to study for his tests. 
D)  a, b, and c 
E)  none of the above 
A)  people are uninformed and uninterested in only some things-not all things. 
B)  his students could be choosing rational ignorance. 
C)  by not taking out time to find out certain things, his students have more time to study for his tests. 
D)  a, b, and c 
E)  none of the above

Question 20

Rational (political)ignorance refers to

Accepted Answer

A)  some voters choosing not to vote in elections. 
B)  the fact that some voters are not smart enough to be informed on political issues. 
C)  the state of not acquiring information about politics and government because the costs of acquiring the information are greater than the benefits. 
D)  political candidates deliberately saying "dumb" things during their campaign. 
E)  none of the above 
A)  some voters choosing not to vote in elections. 
B)  the fact that some voters are not smart enough to be informed on political issues. 
C)  the state of not acquiring information about politics and government because the costs of acquiring the information are greater than the benefits. 
D)  political candidates deliberately saying "dumb" things during their campaign. 
E)  none of the above

Exam 32: Public Choice and Special-Interest-Group Politics

Public choice is concerned with

A person will become informed on a political issue if

Special interest groups

Public choice theory predicts candidates will

Public choice deals with

Exhibit 32-3 -Refer to Exhibit 32-3.The exhibit shows the breakdown of benefits and costs for a five-person community considering whether to purchase a $5,000 statue of Adam Smith to put in the center of the public square.How will each of the five persons (from Milton to Kenneth,in order)vote?

Two candidates,Smith and Jones,are running for the same political office.Last night they were in a debate.It is generally accepted that Smith is perceived more to the left after the debate than before the debate.This is bad news for Jones if before the debate Smith was perceived

Which of the following persons is most likely to become informed on the National Endowment for the Arts?

The simple majority decision rule may generate results that are

Exhibit 32-1 -Refer to Exhibit 32-l.The exhibit shows the breakdown of benefits and costs for a four-person town of a proposed $1,200 addition in books to the public library.The members of the community get to vote on the project at hand,and the majority rules.Given the data,the $1,200 will

Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are

Political candidates in a two-person race prefer to be viewed as occupying the center of the political distribution because

Would we expect the "average" person to take more time to learn about the car he or she is considering purchasing or about the issues in the upcoming U.S.Senate race in his or her state?

Logrolling consists of

A candidate who understands that in a two-person race the person closer to the center of the voter distribution will win is likely to

The state of choosing not to acquire information because the costs of acquiring the information are greater than the benefits is referred to as

Which of the following statements is false?

Rational (political)ignorance refers to

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

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Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

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Market Failure: Externalities, Public Goods, and Asymmetric Information

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

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Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

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Agriculture: Problems, Policies, and Unintended Effects

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