Exam 6: The Economics of Political Action

Use the figure below to answer the following question(s). Figure 6-2 -Figure 6-2 illustrates the four possibilities of the structure of production and consumption for a good or service. In which case is the incentive of producers to be efficient and the incentive for consumers to economize the weakest?

Which of the following statements is false?

A survey of income by county revealed that four of the five wealthiest counties were located in the suburbs surrounding Washington, D.C.Why?

Other things constant, if both the benefits and costs of a public-sector activity are widespread among voters, the political process will generally result in the

Which of the following is true?

When the tax to fund a government project is allocated among voters in proportion to the benefits they receive from the project,

Use the figure below to answer the following question(s). Figure 6-2 -Figure 6-2 illustrates the four possibilities of the structure of production and consumption for a good or service. When the structure of production and consumption for a good places it in quadrant B,

Which of the following factors explains why managers of government agencies have little incentive to achieve operational efficiency?

Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?

Which of the following increases the political power of special interest groups and makes counterproductive government action more likely?

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

Senator Blacklung represents a state that grows a significant amount of tobacco. Not only do many of his constituents work for businesses in this industry, but the tobacco firms also make generous contributions to his reelection campaign. According to public choice theory, which of the following bills would Senator Blacklung be most likely to support?

Which of the following is an example of a transfer payment?

Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?

An analysis of market failure and government failure indicates

Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient?

Which of the following is most likely to result in an increase in crony capitalism?

Public choice analysis

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Suppose domestic automobiles were allocated in the United States the way public education is allocated. Describe how this system might work.