Question 1

When overall production is taken into account, trade restrictions, such as those enacted by the Smoot-Hawley trade bill,

Accepted Answer

A)  save good paying jobs. 
B)  neither create nor destroy jobs; they reallocate them. 
C)  increase employment in the domestic industries that are most productive. 
D)  reduce imports, without affecting the volume of exports. 
A)  save good paying jobs. 
B)  neither create nor destroy jobs; they reallocate them. 
C)  increase employment in the domestic industries that are most productive. 
D)  reduce imports, without affecting the volume of exports.

Question 2

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Accepted Answer

A)  The program provides substantial benefits to a small interest group, and the costs are widespread among voters. 
B)  Both the benefits and costs of the program are widespread among voters. 
C)  The program is financed by a user charge that makes the individuals who benefit from the program pay for its cost. 
D)  The program provides widespread benefits to all voters and imposes a significant cost on a small interest group. 
A)  The program provides substantial benefits to a small interest group, and the costs are widespread among voters. 
B)  Both the benefits and costs of the program are widespread among voters. 
C)  The program is financed by a user charge that makes the individuals who benefit from the program pay for its cost. 
D)  The program provides widespread benefits to all voters and imposes a significant cost on a small interest group.

Question 3

Senator Dogood is pushing for the construction of a new military base in his state even though, from the standpoint of national security, it is clear that there are better places to locate the new military base. Economic theory would suggest that Senator Dogood is

Accepted Answer

A)  acting irrationally; he must not know that the base would be better located in a different state. 
B)  acting rationally; he realizes that constructing the base in his state will increase his chances of getting reelected. 
C)  acting rationally if the country is currently at war but is acting irrationally if the country is not at war. 
D)  trying to do what is best for the country. 
A)  acting irrationally; he must not know that the base would be better located in a different state. 
B)  acting rationally; he realizes that constructing the base in his state will increase his chances of getting reelected. 
C)  acting rationally if the country is currently at war but is acting irrationally if the country is not at war. 
D)  trying to do what is best for the country.

Question 4

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

Accepted Answer

A)  increase their efforts devoted toward market production. 
B)  spend less time attempting to secure redistribution through government. 
C)  spend more time informing themselves about political issues, so they can cast a well-informed vote. 
D)  spend more time rent seeking. 
A)  increase their efforts devoted toward market production. 
B)  spend less time attempting to secure redistribution through government. 
C)  spend more time informing themselves about political issues, so they can cast a well-informed vote. 
D)  spend more time rent seeking.

Question 5

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 and consumers to economize the strongest?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 6

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Accepted Answer

A)  shortsightedness effect. 
B)  public-interest effect. 
C)  free rider problem. 
D)  rational-ignorance effect. 
A)  shortsightedness effect. 
B)  public-interest effect. 
C)  free rider problem. 
D)  rational-ignorance effect.

Question 7

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

Accepted Answer

A)  weak incentives for operational efficiency 
B)  rent-seeking 
C)  the shortsightedness effect 
D)  externalities 
A)  weak incentives for operational efficiency 
B)  rent-seeking 
C)  the shortsightedness effect 
D)  externalities

Question 8

The park in Hammerhead, Florida, built to honor the city's founding father, General Hammerhead, is starting to deteriorate. It would take about $5,000 to restore the General's statue, repair the benches, and repair the fountain, but the city budget is tight. Also, the deterioration is not that noticeable. Mayor Grouper suggests delaying the repair until after the election, three years away. City Councilwoman Halibut notes that by then the park will be dilapidated, and repairs will cost $25,000. From a public choice perspective, what is the likely outcome of this debate?

Accepted Answer

The shortsightedness effect would sugges

When overall production is taken into account, trade restrictions, such as those enacted by the Smoot-Hawley trade bill,

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Senator Dogood is pushing for the construction of a new military base in his state even though, from the standpoint of national security, it is clear that there are better places to locate the new military base. Economic theory would suggest that Senator Dogood is

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

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 and consumers to economize the strongest?

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 6: The Economics of Political Action

When overall production is taken into account, trade restrictions, such as those enacted by the Smoot-Hawley trade bill,

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Senator Dogood is pushing for the construction of a new military base in his state even though, from the standpoint of national security, it is clear that there are better places to locate the new military base. Economic theory would suggest that Senator Dogood is

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

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 and consumers to economize the strongest?

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Which of the following factors weakens the case for private-sector provision of goods and services as opposed to public-sector provision?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters