Question 1

The rational-ignorance effect refers to the

Accepted Answer

A)  lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. 
B)  fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. 
C)  lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. 
D)  problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues. 
A)  lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. 
B)  fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. 
C)  lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. 
D)  problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.

Question 2

Public choice theory assumes each voter will tend to support the political candidate who offers

Accepted Answer

A)  programs with the largest benefits to society. 
B)  the highest potential for being a good leader in times of war. 
C)  programs that create the most equal distribution of income. 
D)  to provide the voter with the most personal benefits at the least personal cost. 
A)  programs with the largest benefits to society. 
B)  the highest potential for being a good leader in times of war. 
C)  programs that create the most equal distribution of income. 
D)  to provide the voter with the most personal benefits at the least personal cost.

Question 3

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

Accepted Answer

A)  the rich to the poor. 
B)  unorganized taxpayers to well-organized interest groups. 
C)  well-organized business groups to consumers. 
D)  none of the above. 
A)  the rich to the poor. 
B)  unorganized taxpayers to well-organized interest groups. 
C)  well-organized business groups to consumers. 
D)  none of the above.

Question 4

The theory of public choice

Accepted Answer

A)  analyzes the likelihood that various public sector alternatives will be instituted. 
B)  assumes that economic incentives influence the choices of voters. 
C)  applies the tools of economics to the collective decision-making process. 
D)  is all of the above. 
A)  analyzes the likelihood that various public sector alternatives will be instituted. 
B)  assumes that economic incentives influence the choices of voters. 
C)  applies the tools of economics to the collective decision-making process. 
D)  is all of the above.

Question 5

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

Accepted Answer

A)  Most of the benefits of pork-barrel projects within your district will accrue to your constituents, whereas most of the costs will be imposed on voters from other districts. 
B)  Most of the costs of pork-barrel projects within your district will be imposed on your constituents, whereas most of the benefits will accrue to voters from other districts. 
C)  Pork producers are a powerful political lobby that will influence the actions of legislators in all districts. 
D)  This is a trick question; in a representative democracy, there is little incentive for legislators to support pork-barrel projects. 
A)  Most of the benefits of pork-barrel projects within your district will accrue to your constituents, whereas most of the costs will be imposed on voters from other districts. 
B)  Most of the costs of pork-barrel projects within your district will be imposed on your constituents, whereas most of the benefits will accrue to voters from other districts. 
C)  Pork producers are a powerful political lobby that will influence the actions of legislators in all districts. 
D)  This is a trick question; in a representative democracy, there is little incentive for legislators to support pork-barrel projects.

Question 6

Public choice analysis suggests that bureaucrats and public-sector managers have a strong incentive to

Accepted Answer

A)  economize on their spending so more funds will be available for other government programs. 
B)  ensure that their budget is exactly the size that would be considered economically efficient. 
C)  expand their budgets to sizes beyond what would be considered economically efficient. 
D)  keep individual legislators fully informed as to every expenditure. 
A)  economize on their spending so more funds will be available for other government programs. 
B)  ensure that their budget is exactly the size that would be considered economically efficient. 
C)  expand their budgets to sizes beyond what would be considered economically efficient. 
D)  keep individual legislators fully informed as to every expenditure.

Question 7

Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?

Accepted Answer

Congressman Localstuff's constituents pr

Question 8

Which of the following is true regarding government expenditures in the United States?

Accepted Answer

A)  As a share of GDP, government expenditures were higher in 1950 than 2010. 
B)  Government expenditures were more than 30 percent of GDP in 1930. 
C)  Government expenditures as a share of GDP grew rapidly between 1930 and 1980. 
D)  In 2010, government expenditures at all levels summed to approximately 10 percent of GDP. 
A)  As a share of GDP, government expenditures were higher in 1950 than 2010. 
B)  Government expenditures were more than 30 percent of GDP in 1930. 
C)  Government expenditures as a share of GDP grew rapidly between 1930 and 1980. 
D)  In 2010, government expenditures at all levels summed to approximately 10 percent of GDP.

Question 9

Pork-barrel legislation typically bundles the pet projects of several special interest groups. Such legislation

Accepted Answer

A)  is frequently enacted, even though the overall benefits to society are less than the overall costs to society. 
B)  seldom benefits special interest groups. 
C)  usually, if successful, helps the majority of taxpayers. 
D)  seldom passes because social benefits are far smaller than social costs. 
A)  is frequently enacted, even though the overall benefits to society are less than the overall costs to society. 
B)  seldom benefits special interest groups. 
C)  usually, if successful, helps the majority of taxpayers. 
D)  seldom passes because social benefits are far smaller than social costs.

Question 10

Which of the following is true about the market and public sectors?

Accepted Answer

A)  Competitive behavior is present in both sectors. 
B)  The public sector utilizes the price mechanism more than the private sector. 
C)  In both sectors, individuals always pay for the goods and services they consume. 
D)  There is more free choice for individual consumers in the public sector than in the private sector. 
A)  Competitive behavior is present in both sectors. 
B)  The public sector utilizes the price mechanism more than the private sector. 
C)  In both sectors, individuals always pay for the goods and services they consume. 
D)  There is more free choice for individual consumers in the public sector than in the private sector.

Question 11

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Accepted Answer

A)  strong because inefficiency is easily detected and leads to the loss of voter support. 
B)  strong because public officials are unconcerned about personal gain. 
C)  weak because government employees are less educated than employees who work in the private sector. 
D)  weak because it is difficult for voters to detect inefficiency and for public officials to gain from actions that would improve the efficiency of government. 
A)  strong because inefficiency is easily detected and leads to the loss of voter support. 
B)  strong because public officials are unconcerned about personal gain. 
C)  weak because government employees are less educated than employees who work in the private sector. 
D)  weak because it is difficult for voters to detect inefficiency and for public officials to gain from actions that would improve the efficiency of government.

Question 12

Which of the following statements is False ?

Accepted Answer

A)  Political activities consistent with economic efficiency tend to emerge naturally from the unconstrained democratic political process. 
B)  Constitutional rules establishing procedures and limiting the ability of the political process to engage in redistributive activities can improve the economic efficiency of government. 
C)  Rent-seeking activity tends to retard the economic prosperity of a nation because it takes resources away from productive private sector activities. 
D)  Unconstrained democratic governments often enact special-interest programs that waste resources and impair the standard of living of a country. 
A)  Political activities consistent with economic efficiency tend to emerge naturally from the unconstrained democratic political process. 
B)  Constitutional rules establishing procedures and limiting the ability of the political process to engage in redistributive activities can improve the economic efficiency of government. 
C)  Rent-seeking activity tends to retard the economic prosperity of a nation because it takes resources away from productive private sector activities. 
D)  Unconstrained democratic governments often enact special-interest programs that waste resources and impair the standard of living of a country.

Question 13

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted, even when economic inefficiency results. In economics this is referred to as the

Accepted Answer

A)  long-term effect. 
B)  political-fallacy effect. 
C)  shortsightedness effect. 
D)  inefficiency effect. 
A)  long-term effect. 
B)  political-fallacy effect. 
C)  shortsightedness effect. 
D)  inefficiency effect.

Question 14

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Accepted Answer

A)  shortsightedness effect. 
B)  public-interest effect. 
C)  free rider problem. 
D)  rational-ignorance effect. 
A)  shortsightedness effect. 
B)  public-interest effect. 
C)  free rider problem. 
D)  rational-ignorance effect.

Question 15

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

Accepted Answer

A)  voters to have little incentive to become informed about candidates and political issues. 
B)  voters to spend a great deal of effort becoming informed about candidates and political issues. 
C)  the percent of people who actually turn out to cast a vote on election day to be very high. 
D)  people to be extremely reluctant to "waste" their votes on a third-party candidate. 
A)  voters to have little incentive to become informed about candidates and political issues. 
B)  voters to spend a great deal of effort becoming informed about candidates and political issues. 
C)  the percent of people who actually turn out to cast a vote on election day to be very high. 
D)  people to be extremely reluctant to "waste" their votes on a third-party candidate.

Question 16

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a

Accepted Answer

A)  special-interest issue. 
B)  minority application. 
C)  commons policy. 
D)  national service. 
A)  special-interest issue. 
B)  minority application. 
C)  commons policy. 
D)  national service.

Question 17

According to the Bureau of Economic Analysis, government income transfer payments amounted to approximately what percent of national income?

Accepted Answer

A)  5 percent 
B)  16 percent 
C)  28 percent 
D)  50 percent 
A)  5 percent 
B)  16 percent 
C)  28 percent 
D)  50 percent

Question 18

The shortsightedness effect suggests that

Accepted Answer

A)  politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future. 
B)  politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period. 
C)  voters will tend to weigh future costs and benefits more heavily than current costs and benefits. 
D)  legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups. 
A)  politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future. 
B)  politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period. 
C)  voters will tend to weigh future costs and benefits more heavily than current costs and benefits. 
D)  legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.

Question 19

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

Accepted Answer

A)  use coercive force against adults to modify their behavior or force them to pay for a good or service. 
B)  direct resources in a manner that serves the public interest rather than the private interest of individuals. 
C)  produce goods and services that people value. 
D)  escape the constraints imposed by scarcity. 
A)  use coercive force against adults to modify their behavior or force them to pay for a good or service. 
B)  direct resources in a manner that serves the public interest rather than the private interest of individuals. 
C)  produce goods and services that people value. 
D)  escape the constraints imposed by scarcity.

Question 20

How does a voting structure that relies on unanimity for an action guarantee that no one will be adversely affected? Why isn't this type of decision making used more frequently?

Accepted Answer

Since everyone must agree for a decision

The rational-ignorance effect refers to the

Public choice theory assumes each voter will tend to support the political candidate who offers

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

The theory of public choice

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

Public choice analysis suggests that bureaucrats and public-sector managers have a strong incentive to

Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?

Which of the following is true regarding government expenditures in the United States?

Pork-barrel legislation typically bundles the pet projects of several special interest groups. Such legislation

Which of the following is true about the market and public sectors?

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Which of the following statements is False ?

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted, even when economic inefficiency results. In economics this is referred to as the

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a

According to the Bureau of Economic Analysis, government income transfer payments amounted to approximately what percent of national income?

The shortsightedness effect suggests that

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

How does a voting structure that relies on unanimity for an action guarantee that no one will be adversely affected? Why isn't this type of decision making used more frequently?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Exam 6: The Economics of Political Action

The rational-ignorance effect refers to the

Public choice theory assumes each voter will tend to support the political candidate who offers

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

The theory of public choice

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

Public choice analysis suggests that bureaucrats and public-sector managers have a strong incentive to

Congressman Localstuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?

Which of the following is true regarding government expenditures in the United States?

Pork-barrel legislation typically bundles the pet projects of several special interest groups. Such legislation

Which of the following is true about the market and public sectors?

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

Which of the following statements is False ?

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted, even when economic inefficiency results. In economics this is referred to as the

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a

According to the Bureau of Economic Analysis, government income transfer payments amounted to approximately what percent of national income?

The shortsightedness effect suggests that

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to

How does a voting structure that relies on unanimity for an action guarantee that no one will be adversely affected? Why isn't this type of decision making used more frequently?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters