Question 1

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 2

Narrow, speciﬁcally designated expenditures that are included in more comprehensive legislation are known as

Accepted Answer

A)  earmarks. 
B)  logrolls. 
C)  beneﬁts-received allocations. 
D)  progressive expenditures. 
A)  earmarks. 
B)  logrolls. 
C)  beneﬁts-received allocations. 
D)  progressive expenditures.

Question 3

Assume that a government is considering a new social program and may choose to include in this program one of four progressively larger projects. The marginal cost and the marginal bene?ts of each of the four
Projects are given in the table below.
$$\begin{array} { | c | c | c | } 
\hline \text { Project } & \text { Marginal Cost } & \text { Marginal Benefit } \
\hline A & \$ 1 \text { Billion } & \$ 2 \text { Billion } \
\hline B & 2 \text { Billion } & 3 \text { Billion } \
\hline C & 5 \text { Billion } & 7 \text { Billion } \
\hline D & 7 \text { Billion } & 8 \text { Billion } \
\hline
\end{array}$$ Suppose that the government chooses to do project C. What is the total cost and total bene?t of doing project
C?

Accepted Answer

A)  Total cost is $5 billion, and total bene?t is $7 billion. 
B)  Total cost is $4 billion, and total bene?t is $7 billion. 
C)  Total cost is $8 billion, and total bene?t is $12 billion. 
D)  Total cost is $15 billion, and total bene?t is $20 billion. 
A)  Total cost is $5 billion, and total bene?t is $7 billion. 
B)  Total cost is $4 billion, and total bene?t is $7 billion. 
C)  Total cost is $8 billion, and total bene?t is $12 billion. 
D)  Total cost is $15 billion, and total bene?t is $20 billion.

Question 4

Explain the paradox of voting.

Accepted Answer

The paradox of voting is a situation in

Question 5

Logrolling can either increase or diminish economic eﬃciency.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The ﬁeld of economics that analyzes government decision making, politics, and elections is called

Accepted Answer

A)  public ﬁnance. 
B)  public choice theory. 
C)  collective economics. 
D)  political economy. 
A)  public ﬁnance. 
B)  public choice theory. 
C)  collective economics. 
D)  political economy.

Question 8

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 9

The major problem with paired-choice majority voting is that the outcome

Accepted Answer

A)  is constant. 
B)  is subject to bribery and abuse. 
C)  may depend on the order of the voting. 
D)  results in clear preferences among the choices. 
A)  is constant. 
B)  is subject to bribery and abuse. 
C)  may depend on the order of the voting. 
D)  results in clear preferences among the choices.

Question 10

According to the paradox of voting,

Accepted Answer

A)  public goods that cost more than the total beneﬁts they confer may get produced under majority voting. 
B)  trading of votes may either add to or subtract from economic eﬃciency. 
C)  the median voter decides what public goods all voters should have. 
D)  majority voting fails, under some circumstances, to make consistent choices that reﬂect the community's underlying preferences. 
A)  public goods that cost more than the total beneﬁts they confer may get produced under majority voting. 
B)  trading of votes may either add to or subtract from economic eﬃciency. 
C)  the median voter decides what public goods all voters should have. 
D)  majority voting fails, under some circumstances, to make consistent choices that reﬂect the community's underlying preferences.

Question 11

Suppose a college economics department decides to use a single economics text for all sections of principles of economics. Also assume that the three individual members of the textbook selection committee have the
Following preferences.
  Assuming all other textbook qualities except analytical level are the same, majority voting will result in the
Committee

Accepted Answer

A)  being deadlocked and unable to decide on a book. 
B)  selecting the C/F book. 
C)  selecting the M/B book. 
D)  selecting the O/S book. 
A)  being deadlocked and unable to decide on a book. 
B)  selecting the C/F book. 
C)  selecting the M/B book. 
D)  selecting the O/S book.

Question 12

If one person's consumption of a good does not preclude another's consumption, the good is said to be

Accepted Answer

A)  nonrival in consumption. 
B)  rival in consumption. 
C)  nonexcludable. 
D)  excludable. 
A)  nonrival in consumption. 
B)  rival in consumption. 
C)  nonexcludable. 
D)  excludable.

Question 13

Why would private business be considered more eﬃcient than public agencies?

Accepted Answer

Some economists contend that public agen

Question 14

What are quasi-public goods? Explain why quasi-public goods are often provided by government rather than
private businesses.

Accepted Answer

A quasi-public good or service is one to

Question 15

The idea of government failure includes all of the following except

Accepted Answer

A)  the special-interest effect. 
B)  bureaucratic ineﬃciency. 
C)  pressure by special-interest groups. 
D)  extensive positive externalities from public and quasi-public goods. 
A)  the special-interest effect. 
B)  bureaucratic ineﬃciency. 
C)  pressure by special-interest groups. 
D)  extensive positive externalities from public and quasi-public goods.

Question 16

Deregulation

Accepted Answer

A)  tends to improve outcomes in industries generating substantial negative externalities. 
B)  eliminates regulatory capture and can improve outcomes by increasing competition. 
C)  is most appropriate to undertake by government agencies responsible for human safety, ﬁnancial regulation, and environmental protection. 
D)  always generates greater economic eﬃciency. 
A)  tends to improve outcomes in industries generating substantial negative externalities. 
B)  eliminates regulatory capture and can improve outcomes by increasing competition. 
C)  is most appropriate to undertake by government agencies responsible for human safety, ﬁnancial regulation, and environmental protection. 
D)  always generates greater economic eﬃciency.

Question 17

Rent-seeking behavior in public choice theory refers to

Accepted Answer

A)  politicians trading votes with one another. 
B)  politicians 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)  politicians 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.

Question 18

In thinking about the "principal-agent problem" in a democratic government, we assign the role of "principal" to
the government.

Accepted Answer

A) True 
 B)False

Question 19

Political corruption occurs whenever

Accepted Answer

A)  logrolling is used to secure votes for controversial legislation. 
B)  government oﬃcials use unlawful misdirection of governmental resources for their own personal gain. 
C)  special interest groups contribute to elected oﬃcials, who in turn support legislation that beneﬁts the special interest group. 
D)  there is pork barrel politics involved. 
A)  logrolling is used to secure votes for controversial legislation. 
B)  government oﬃcials use unlawful misdirection of governmental resources for their own personal gain. 
C)  special interest groups contribute to elected oﬃcials, who in turn support legislation that beneﬁts the special interest group. 
D)  there is pork barrel politics involved.

Question 20

Which of the following is related to the special-interest effect?

Accepted Answer

A)  pork-barrel politics 
B)  earmarks 
C)  logrolling 
D)  all of these 
A)  pork-barrel politics 
B)  earmarks 
C)  logrolling 
D)  all of these

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

Narrow, speciﬁcally designated expenditures that are included in more comprehensive legislation are known as

Explain the paradox of voting.

Logrolling can either increase or diminish economic eﬃciency.

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

The ﬁeld of economics that analyzes government decision making, politics, and elections is called

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.

The major problem with paired-choice majority voting is that the outcome

According to the paradox of voting,

If one person's consumption of a good does not preclude another's consumption, the good is said to be

Why would private business be considered more eﬃcient than public agencies?

What are quasi-public goods? Explain why quasi-public goods are often provided by government rather than private businesses.

The idea of government failure includes all of the following except

Deregulation

Rent-seeking behavior in public choice theory refers to

In thinking about the "principal-agent problem" in a democratic government, we assign the role of "principal" to the government.

Political corruption occurs whenever

Which of the following is related to the special-interest effect?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

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

Filters

Exam 5: Public Goods, Public Choice, and Government Failure

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

Narrow, speciﬁcally designated expenditures that are included in more comprehensive legislation are known as

Explain the paradox of voting.

Logrolling can either increase or diminish economic eﬃciency.

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

The ﬁeld of economics that analyzes government decision making, politics, and elections is called

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.

The major problem with paired-choice majority voting is that the outcome

According to the paradox of voting,

If one person's consumption of a good does not preclude another's consumption, the good is said to be

Why would private business be considered more eﬃcient than public agencies?

What are quasi-public goods? Explain why quasi-public goods are often provided by government rather than private businesses.

The idea of government failure includes all of the following except

Deregulation

Rent-seeking behavior in public choice theory refers to

In thinking about the "principal-agent problem" in a democratic government, we assign the role of "principal" to the government.

Political corruption occurs whenever

Which of the following is related to the special-interest effect?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

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

Filters