Exam 6: The Economics of Political Action

Use the figure below to answer the following question(s). Figure 6-2 Figure 6-2 illustrates the four possibilities of the structure of production and consumption for a good or service. When the structure of production and consumption for a good places it in quadrant B,

In 2010, government income transfers redistributed what percentage of national income?

Economists use the term shortsightedness effect to describe which one of the following phenomena?

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

When analyzing public sector decision making, economic theory assumes that voters, politicians, and government officials will

When the government both provides a service and covers its costs through taxation,

Which of the following is an example of political action that reflects the shortsightedness effect?

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

Under democratic representative government, spending on a government program will likely be larger than the amount consistent with economic efficiency when

According to public choice theory, which of the following groups will likely benefit the most from government income transfers under a system of representative democracy?

Use the figure below to answer the following question(s). Figure 6-1 Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. For which type would the government most likely fail to undertake many projects that would be considered efficient or productive (in other words, do too few of them relative to economic efficiency)?

Which of the following is true?

Senator Spendall is able to use his position on an important committee to set aside government funding specifically for a new bridge in his hometown. This is an example of

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Which of the following provides the best summary of the basic idea of public choice analysis?

Public choice analysis

Direct income transfers account for approximately what percentage of total government spending?

Giving local governments more power is less dangerous than giving the same power to the national government because

Which of the following refers to when legislators trade votes on legislation?

A local government operates a city recreation center with a pool and tennis courts. The center is financed through $50 annual membership fees (required for members to use it). This type of financing is an example of a