Question 1

Most income transfer programs in the United States

Accepted Answer

A)  are means-tested programs that transfer income to the poor. 
B)  allocate income to small businesses and small farmers. 
C)  are designed to help those with very little economic and political power. 
D)  allocate income to concentrated interest groups, such as the elderly, large farmers, and business interests. 
A)  are means-tested programs that transfer income to the poor. 
B)  allocate income to small businesses and small farmers. 
C)  are designed to help those with very little economic and political power. 
D)  allocate income to concentrated interest groups, such as the elderly, large farmers, and business interests.

Question 2

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

Accepted Answer

A)  the shortsightedness effect 
B)  the special-interest effect 
C)  rational-ignorance effect 
D)  logrolling 
A)  the shortsightedness effect 
B)  the special-interest effect 
C)  rational-ignorance effect 
D)  logrolling

Question 3

With a strong and active federal government, why do we need state and local governments?

Accepted Answer

Our model of government is one of fiscal

Question 4

In a representative democracy, government action results from the

Accepted Answer

A)  choices of voters. 
B)  legislative decisions by politicians. 
C)  political action of organized interest groups. 
D)  complex interaction of all of the above. 
A)  choices of voters. 
B)  legislative decisions by politicians. 
C)  political action of organized interest groups. 
D)  complex interaction of all of the above.

Question 5

Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?

Accepted Answer

A)  progressive income tax 
B)  retail sales tax 
C)  property tax 
D)  user charges 
A)  progressive income tax 
B)  retail sales tax 
C)  property tax 
D)  user charges

Question 6

When voters pay taxes in proportion to the benefits they receive from government projects,

Accepted Answer

A)  efficient projects will tend to be opposed by a majority of voters. 
B)  inefficient projects will often be favored by a majority of voters. 
C)  projects that are efficient will tend to be favored by an overwhelming majority of voters. 
D)  democratic political decision making can be expected to work poorly. 
A)  efficient projects will tend to be opposed by a majority of voters. 
B)  inefficient projects will often be favored by a majority of voters. 
C)  projects that are efficient will tend to be favored by an overwhelming majority of voters. 
D)  democratic political decision making can be expected to work poorly.

Question 7

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

Accepted Answer

A)  tax costs are levied in direct proportion with the benefits received. 
B)  both the costs and benefits are widespread among the voters. 
C)  benefits of the program are highly concentrated, while the costs are widely dispersed among voters. 
D)  costs of the program are highly concentrated, while the benefits are widely dispersed among voters. 
A)  tax costs are levied in direct proportion with the benefits received. 
B)  both the costs and benefits are widespread among the voters. 
C)  benefits of the program are highly concentrated, while the costs are widely dispersed among voters. 
D)  costs of the program are highly concentrated, while the benefits are widely dispersed among voters.

Question 8

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 9

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Accepted Answer

A)  based on careful analysis of benefits relative to cost. 
B)  designed to redistribute income from the rich to the poor. 
C)  that reflect the political attractiveness of special-interest issues. 
D)  that promote the general welfare. 
A)  based on careful analysis of benefits relative to cost. 
B)  designed to redistribute income from the rich to the poor. 
C)  that reflect the political attractiveness of special-interest issues. 
D)  that promote the general welfare.

Question 10

According to the shortsightedness effect, politicians tend to favor projects with

Accepted Answer

A)  short-run benefits and short-run costs. 
B)  short-run benefits and long-run costs. 
C)  long-run benefits and short-run costs. 
D)  long-run benefits and long-run costs. 
A)  short-run benefits and short-run costs. 
B)  short-run benefits and long-run costs. 
C)  long-run benefits and short-run costs. 
D)  long-run benefits and long-run costs.

Question 11

Which of the following factors weakens the case for private-sector provision of goods and services relative to public-sector provision?

Accepted Answer

A)  externalities 
B)  the rational-ignorance effect 
C)  the shortsightedness effect 
D)  well-informed consumers 
A)  externalities 
B)  the rational-ignorance effect 
C)  the shortsightedness effect 
D)  well-informed consumers

Question 12

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

Accepted Answer

A)  head tax. 
B)  excise fee. 
C)  user charge. 
D)  progressive tax. 
A)  head tax. 
B)  excise fee. 
C)  user charge. 
D)  progressive tax.

Question 13

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Accepted Answer

A)  based on careful analysis of benefits relative to cost. 
B)  designed to redistribute income from the rich to the poor. 
C)  that reflect the political attractiveness of special-interest issues. 
D)  that promote the general welfare. 
A)  based on careful analysis of benefits relative to cost. 
B)  designed to redistribute income from the rich to the poor. 
C)  that reflect the political attractiveness of special-interest issues. 
D)  that promote the general welfare.

Question 14

Which of the following is true?

Accepted Answer

A)  Competitive behavior is present in the market sector but not in the public sector. 
B)  Because candidates for public office represent a bundle of views, there is more ability for individuals to make their preferences count on specific issues than in the market sector. 
C)  When decisions are made democratically, the economic and political power of all individuals will be equal unlike in the market sector. 
D)  The reality of the aggregate consumption-aggregate payment link imposed by scarcity is present in both the market and public sectors. 
A)  Competitive behavior is present in the market sector but not in the public sector. 
B)  Because candidates for public office represent a bundle of views, there is more ability for individuals to make their preferences count on specific issues than in the market sector. 
C)  When decisions are made democratically, the economic and political power of all individuals will be equal unlike in the market sector. 
D)  The reality of the aggregate consumption-aggregate payment link imposed by scarcity is present in both the market and public sectors.

Question 15

Which of the following explains why elected representatives will find borrowing to be an attractive method of financing current government programs?

Accepted Answer

A)  the shortsightedness effect 
B)  pork-barrel politics 
C)  the invisible hand principle 
D)  the public goods argument for government spending programs 
A)  the shortsightedness effect 
B)  pork-barrel politics 
C)  the invisible hand principle 
D)  the public goods argument for government spending programs

Question 16

Which of the following represents why private production tends to be more efficient then government production?

Accepted Answer

A)  Politicians have a strong incentive to support projects that have immediate and easily recognized benefits and distant and unidentifiable costs, even if the total costs outweigh the total benefits. 
B)  Politicians have a strong incentive to support programs where the benefits are highly concentrated on special interest groups and the costs are widely dispersed among voters, even if the total costs outweigh the benefits. 
C)  Private companies face a profit motive that keeps them operating efficiently, government bureaucracies use taxpayer money and, therefore, do not face this profit motive. 
D)  All of the above are reasons why private production tends to be more efficient then government production. 
A)  Politicians have a strong incentive to support projects that have immediate and easily recognized benefits and distant and unidentifiable costs, even if the total costs outweigh the total benefits. 
B)  Politicians have a strong incentive to support programs where the benefits are highly concentrated on special interest groups and the costs are widely dispersed among voters, even if the total costs outweigh the benefits. 
C)  Private companies face a profit motive that keeps them operating efficiently, government bureaucracies use taxpayer money and, therefore, do not face this profit motive. 
D)  All of the above are reasons why private production tends to be more efficient then government production.

Question 17

Approximately what percent of government transfer payments are directed toward the poor (means tested)?

Accepted Answer

A)  one-sixth 
B)  one-fourth 
C)  one-half 
D)  three-quarters 
A)  one-sixth 
B)  one-fourth 
C)  one-half 
D)  three-quarters

Question 18

Dairy farmers hold an annual Capitol Hill ice cream social that provides free ice cream for congressional staffers during which time representatives from the industry discuss issues with, and provide information to, congressional staff. This is an example of

Accepted Answer

A)  logrolling. 
B)  rent seeking. 
C)  pork-barrel legislation. 
D)  the shortsightedness effect. 
A)  logrolling. 
B)  rent seeking. 
C)  pork-barrel legislation. 
D)  the shortsightedness effect.

Question 19

Public choice theory indicates that competitive forces between candidates in elections provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

Accepted Answer

A)  is best for the economic and political situations the country faces. 
B)  will most likely clear the legislative process. 
C)  will increase the welfare of society. 
D)  will increase her chances of winning elections. 
A)  is best for the economic and political situations the country faces. 
B)  will most likely clear the legislative process. 
C)  will increase the welfare of society. 
D)  will increase her chances of winning elections.

Question 20

When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,

Accepted Answer

A)  consumers have a strong incentive to search out those firms offering them the best deal. 
B)  private producers of such goods will have little incentive to control costs and provide them at low prices. 
C)  goods and services will only be supplied if consumers are willing to pay an amount sufficient to cover their production costs. 
D)  the invisible hand will direct consumers and producers toward an efficient level of output. 
A)  consumers have a strong incentive to search out those firms offering them the best deal. 
B)  private producers of such goods will have little incentive to control costs and provide them at low prices. 
C)  goods and services will only be supplied if consumers are willing to pay an amount sufficient to cover their production costs. 
D)  the invisible hand will direct consumers and producers toward an efficient level of output.

Most income transfer programs in the United States

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

With a strong and active federal government, why do we need state and local governments?

In a representative democracy, government action results from the

When voters pay taxes in proportion to the benefits they receive from government projects,

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

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

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

According to the shortsightedness effect, politicians tend to favor projects with

Which of the following factors weakens the case for private-sector provision of goods and services relative to public-sector provision?

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

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Which of the following is true?

Which of the following explains why elected representatives will find borrowing to be an attractive method of financing current government programs?

Which of the following represents why private production tends to be more efficient then government production?

Approximately what percent of government transfer payments are directed toward the poor (means tested)?

Dairy farmers hold an annual Capitol Hill ice cream social that provides free ice cream for congressional staffers during which time representatives from the industry discuss issues with, and provide information to, congressional staff. This is an example of

Public choice theory indicates that competitive forces between candidates in elections provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,

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

Most income transfer programs in the United States

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

With a strong and active federal government, why do we need state and local governments?

In a representative democracy, government action results from the

When voters pay taxes in proportion to the benefits they receive from government projects,

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

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

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

According to the shortsightedness effect, politicians tend to favor projects with

Which of the following factors weakens the case for private-sector provision of goods and services relative to public-sector provision?

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

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Which of the following is true?

Which of the following explains why elected representatives will find borrowing to be an attractive method of financing current government programs?

Which of the following represents why private production tends to be more efficient then government production?

Approximately what percent of government transfer payments are directed toward the poor (means tested)?

Dairy farmers hold an annual Capitol Hill ice cream social that provides free ice cream for congressional staffers during which time representatives from the industry discuss issues with, and provide information to, congressional staff. This is an example of

Public choice theory indicates that competitive forces between candidates in elections provide a politician with a strong incentive to offer voters a bundle of political goods that she believes

When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,

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