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

A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to

Which of the following would be the best example of regulatory capture?

Which of the following would best explain why regulatory capture is a problem?

Which of the following is the best example of rent-seeking behavior?

In corporations, owners are __________________ and managers are ________________.

Because majority voting fails to incorporate the strength of the preferences of individual voters, it

The appeal to government for special benefits at taxpayers' or someone else's expense is called the paradox of voting.

The following data are for a series of increasingly extensive ?ood-control projects. Total Cost per Year Total Benefit per Year Plan A= Levees \ 10,000 \ 16,000 Plan B= Small Reservoir 24,000 36,000 Plan C = Medium Reservoir 44,000 52,000 Plan D= Large Reservoir 72,000 64,000 For Plan D marginal costs and marginal bene?ts are

Refer to the table. The inconsistency illustrated by the table is that, while a majority of voters prefer the

According to the marginal-cost-marginal-benefit rule,

Regulatory capture occurs when government exerts excessive control over an industry.

In presidential elections, voters often find that they do not agree with any single candidate on all the issues that matter to them (the voters). This is known as the

Rivalry means that when one person buys and consumes a product, it is not available for purchase and consumption by another person.

Critics of government contend that the market system creates incentives and pressures for internal efficiency that are absent in the public sector.

New Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime Control. This table shows the expected total annual costs and bene?ts of these alternatives. Total Costs per Year Total Benefits per Year (reduction in the costs of crime) Level One-1 Security Officer \ 20,000 \ 80,000 Level Two -1 Security Officer with Guard Dog 30,000 120,000 Level Three -1 Security Officer with Guard Dog and Patrol Car 40,000 140,000 Level Four -2 Security Officers with Guard Dog 50,000 155,000 Level Five -2 Security Officers with Guard Dog and Patrol Car 60,000 160,000 Based on cost-bene?t analysis, New Normal University should undertake Level

Refer to the table. In a choice between parks and education,

New Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime Control. This table shows the expected total annual costs and bene?ts of these alternatives. Total Costs per Year Total Benefits per Year (reduction in the costs of crime) Level One -1 Security Officer \ 20,000 \ 80,000 Level Two -1 Security Officer with Guard Dog 30,000 120,000 Level Three -1 Security Officer with Guard Dog and Patrol Car 40,000 140,000 Level Four -2 Security Officers with Guard Dog 50,000 155,000 Level Five -2 Security Officers with Guard Dog and Patrol Car 60,000 160,000 If New Normal University undertakes program Level Three,

Some economists contend that government agencies are generally less efficient than private businesses due to the following reasons, except

The principle that under some circumstances majority voting fails to make consistent choices reflecting the community's underlying preference is best demonstrated by the

Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $8, respectively, for the third unit of a public good. Also, assume that the marginal cost of the third unit is $17. We Can conclude that