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

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

Answer this question based on the following information for a public good. Pₐ and Pᵦ represent the prices that citizens (a)and (b), the only two people in this nation, are willing to pay for additional units of a quantity (Q_c )of the public good. Qₛrepresents the quantity of the public good supplied by government at each of the collective prices. In equilibrium, the marginal benefit and cost of the public good will be

Regulatory capture is said to have occurred when which of the following is true?

Answer the question based on the following information for four highway programs of increasing scope. All figures are in millions of dollars. The data indicate that

If many people in a community get flu shots, the whole community benefits, including those who did not get flu shots. Therefore, not enough people may decide to get the shots. This is one illustration of

The following data are for a series of increasingly extensive flood-control projects. Plan C entails

The following data are for a series of increasingly extensive flood-control projects. For Plan D marginal costs and marginal benefits are

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

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 benefits of these alternatives. The net benefits of crime control for Level 3 are

In 2018, U.S. federal government legislation authorized

Which one of the following topics would be of the most interest to a public choice economist?

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?

A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4). The estimated marginal costs and marginal benefits of each successive scale of the project are given in the table below. What is the total cost and total benefit of the scale-3 project?

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

Explain the principal-agent problem for a representative democracy.

The special-interest effect in government is the reason why firms in some industries are willing to pay huge amounts of money to lobbyists.

The trading of votes by elected officials to secure favorable outcomes is called

Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $5. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to

Nonrivalry and nonexcludability are the main characteristics of

Interest groups result when people