Question 1

The political technique called logrolling

Accepted Answer

A) always increases economic efficiency. 
B) always decreases economic efficiency. 
C) involves trading votes to secure favorable outcomes that otherwise could be rejected. 
D) is an example of the paradox of voting. 
A) always increases economic efficiency. 
B) always decreases economic efficiency. 
C) involves trading votes to secure favorable outcomes that otherwise could be rejected. 
D) is an example of the paradox of voting.

Question 2

The so-called collective action problem is the reason why

Accepted Answer

A) taxpayers are not able to effectively counter special-interest groups. 
B) pork-barrel politics often fail to pass legislation. 
C) we have local and national elections. 
D) majority voting can lead to economically inefficient outcomes. 
A) taxpayers are not able to effectively counter special-interest groups. 
B) pork-barrel politics often fail to pass legislation. 
C) we have local and national elections. 
D) majority voting can lead to economically inefficient outcomes.

Question 3

The median-voter model implies that a political office seeker will

Accepted Answer

A) adopt more extreme views when seeking his or her party's nomination than when running against the other party's opponent. 
B) adopt less extreme views when seeking his or her party's nomination than when running against the other party's opponent. 
C) favor extensive government spending because demand curves for public goods are added vertically rather than horizontally. 
D) favor the private resolution of externality problems rather than governmental intervention. 
A) adopt more extreme views when seeking his or her party's nomination than when running against the other party's opponent. 
B) adopt less extreme views when seeking his or her party's nomination than when running against the other party's opponent. 
C) favor extensive government spending because demand curves for public goods are added vertically rather than horizontally. 
D) favor the private resolution of externality problems rather than governmental intervention.

Question 4

The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state.From this we can definitively conclude

Accepted Answer

A) that political corruption has occurred. 
B) that logrolling has occurred. 
C) that a principal-agent problem has occurred. 
D) nothing; the Road Runner Club may have donated to Senator Sly because he already supported the jogging paths. 
A) that political corruption has occurred. 
B) that logrolling has occurred. 
C) that a principal-agent problem has occurred. 
D) nothing; the Road Runner Club may have donated to Senator Sly because he already supported the jogging paths.

Question 5

Which would be an avenue for resolving the inefficiencies associated with majority voting?

Accepted Answer

A) the paradox of voting 
B) progressive taxation 
C) proportional taxation 
D) special-interest groups 
A) the paradox of voting 
B) progressive taxation 
C) proportional taxation 
D) special-interest groups

Question 6

Regulatory capture in government happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry.

Accepted Answer

A) True 
 B)False

Question 7

Politicians who have to go through elections tend to focus on the short-term net benefits of projects because of

Accepted Answer

A) voters' tendency to more easily see short-term benefits rather than long-term ones. 
B) the special-interest effect of specific groups among the electorate. 
C) the ability of government to coerce people to do things involuntarily. 
D) pork-barrel politics and the principal-agent problem. 
A) voters' tendency to more easily see short-term benefits rather than long-term ones. 
B) the special-interest effect of specific groups among the electorate. 
C) the ability of government to coerce people to do things involuntarily. 
D) pork-barrel politics and the principal-agent problem.

Question 8

In the median-voter model, half the voters have stronger or more positive preferences than the median voter, while half of the voters have weaker or more negative preferences.

Accepted Answer

A) True 
 B)False

Question 9

Government's ability to reduce private-sector economic risks through laws and regulations would encourage all of the following, except

Accepted Answer

A) higher levels of private economic investment. 
B) formation of new businesses. 
C) introduction of new products and processes. 
D) reduction of private goods and services. 
A) higher levels of private economic investment. 
B) formation of new businesses. 
C) introduction of new products and processes. 
D) reduction of private goods and services.

Question 10

Many state and local governments in the U.S.have balanced-budget laws in order to prevent politicians from

Accepted Answer

A) creating a "small government" economy. 
B) succumbing to voters' strong preference for budget deficits. 
C) facing a principal-agent problem. 
D) collecting too much taxes. 
A) creating a "small government" economy. 
B) succumbing to voters' strong preference for budget deficits. 
C) facing a principal-agent problem. 
D) collecting too much taxes.

Question 11

Government can use its ability to coerce toward improving economic efficiency by

Accepted Answer

A) reducing the production of output with external benefits. 
B) reducing the production of output with public-goods characteristics. 
C) increasing the production of output with external benefits. 
D) increasing the production of output with external costs. 
A) reducing the production of output with external benefits. 
B) reducing the production of output with public-goods characteristics. 
C) increasing the production of output with external benefits. 
D) increasing the production of output with external costs.

Question 12

In the median-voter model, the median voter refers to the voter who makes her choice at the midpoint of the voting period.

Accepted Answer

A) True 
 B)False

Question 13

Government loan guarantees tend to socialize gains and privatize losses.

Accepted Answer

A) True 
 B)False

Question 14

Information problems create inefficient outcomes in

Accepted Answer

A) the private sector but not the public sector. 
B) the public sector but not the private sector. 
C) neither the private nor the public sector. 
D) both the private and the public sectors. 
A) the private sector but not the public sector. 
B) the public sector but not the private sector. 
C) neither the private nor the public sector. 
D) both the private and the public sectors.

Question 15

Pork-barrel politics is a good illustration of the "clear benefits, hidden costs" perspective of politicians.

Accepted Answer

A) True 
 B)False

Question 16

In making sure that laws are uniformly enforced and applied, one consequence is that government creates inflexibility.

Accepted Answer

A) True 
 B)False

Question 17

Voters are making a choice to spend money on three projects: a dam, a school, or a road.In the choice between the dam and the school, the majority favors the school.In a choice between a dam and a road, the majority favors a dam.In a choice between a road and a school, the majority favors a road.These rankings indicate that majority voting may

Accepted Answer

A) result in economically efficient outcomes because of rent-seeking behavior. 
B) reflect irrational preferences. 
C) produce inconsistent choices. 
D) lead to consistent choices in spite of irrational community preferences. 
A) result in economically efficient outcomes because of rent-seeking behavior. 
B) reflect irrational preferences. 
C) produce inconsistent choices. 
D) lead to consistent choices in spite of irrational community preferences.

Question 18

Rent-seeking behavior in public choice theory refers to

Accepted Answer

A) politicians trading votes with one another. 
B) receiving perks and freebies from businesses trying to sway their votes. 
C) specific groups appealing to government for special benefits at someone else's expense. 
D) politicians getting low rent for their living quarters when government is in session. 
A) politicians trading votes with one another. 
B) receiving perks and freebies from businesses trying to sway their votes. 
C) specific groups appealing to government for special benefits at someone else's expense. 
D) politicians getting low rent for their living quarters when government is in session.

Exam 5: Governments Role and Government Failure

The political technique called logrolling

The so-called collective action problem is the reason why

The median-voter model implies that a political office seeker will

The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state.From this we can definitively conclude

Which would be an avenue for resolving the inefficiencies associated with majority voting?

Regulatory capture in government happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry.

Politicians who have to go through elections tend to focus on the short-term net benefits of projects because of

In the median-voter model, half the voters have stronger or more positive preferences than the median voter, while half of the voters have weaker or more negative preferences.

Government's ability to reduce private-sector economic risks through laws and regulations would encourage all of the following, except

Many state and local governments in the U.S.have balanced-budget laws in order to prevent politicians from

Government can use its ability to coerce toward improving economic efficiency by

In the median-voter model, the median voter refers to the voter who makes her choice at the midpoint of the voting period.

Government loan guarantees tend to socialize gains and privatize losses.

Information problems create inefficient outcomes in

Pork-barrel politics is a good illustration of the "clear benefits, hidden costs" perspective of politicians.

In making sure that laws are uniformly enforced and applied, one consequence is that government creates inflexibility.

Rent-seeking behavior in public choice theory refers to

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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