Exam 6: The Economics of Political Action

Which of the following is an example of a good that is produced by the public sector but consumers purchase it in proportion to the benefit received?

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. This can be expected because of

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

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

Legislation that contains a number of projects benefiting local interests at the expense of the general taxpayer is called

Market allocation and the political process differ in that

Government action will often result in the counterproductive use of resources because

People who spend more time and effort investigating the advantages and disadvantages of different automobile models when they go to purchase one than they do investigating the strengths and weaknesses of presidential candidates are saying, in effect, that

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

Suppose we coupled the pay of Congress with the federal budget, so that for every billion dollars of deficit spending, a lawmaker's pay would be reduced $1,000. How would this affect fiscal policy?

Legislators often gain by bundling a number of projects benefiting local districts at the expense of general taxpayers together on a single bill. Such legislation is called

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

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

Public choice analysis

A politician may be considered an entrepreneur in the sense that

Other things constant, if both the benefits and costs of a public-sector activity are widespread among voters, the political process will generally result in the

Public choice analysis indicates that

Senator Blacklung represents a state that grows a significant amount of tobacco. Not only do many of his constituents work for businesses in this industry, but the tobacco firms also make generous contributions to his reelection campaign. According to public choice theory, which of the following bills would Senator Blacklung be most likely to support?

Which of the following explains why managers of government agencies have little incentive to achieve operational efficiency?

An analysis of market failure and government failure indicates