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

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 The marginal bene?t of crime control for Level Two is

Suppose that in a series of paired-choice votes, a new park is preferred to a new recreation center and a new recreation center is preferred to street widening. Also suppose that street widening is preferred to a new park. This set of votes is an example of the

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

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

Describe the two characteristics of private goods.

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

Does majority voting lead to efficient outcomes?

(Last Word) Location subsidies include all the following except

When the special-interest effect is the major reason for the passage of a government policy or project, then economic efficiency will always improve.

Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $40 for the third unit of a public good; Kara is willing to pay $25. If the marginal cost of producing the third unit is $100, what is the Minimum amount that Susie must be willing to pay for it to be efficient for government to produce the third Unit?

In representative democracy, voters are ____________ and politicians are ______________.

Government in a market system can increase economic efficiency by collecting taxes in order to subsidize the production of

(Consider This) Why are mohair subsidies still being paid although their initial purpose has long expired?

(Consider This) A study of hospitals, power plants, and water utilities found that

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

Public choice theorists contend that

Nobody gains from pork-barrel politics other than the politicians.

Which statement best describes the special-interest effect?

In assessing the efficiency of government policy, economic analysis would focus on

The optimal quantity of a public good is where the total benefits from it are equal to the total costs of producing it.