Exam 6: The Economics of Political Action

Market allocation and the political process differ in that

Which of the following is true?

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

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)?

Public choice analysis

Which of the following is true of government activities under a system of representative democracy?

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

The rational-ignorance effect is a result of

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. A tariff on imported steel to protect jobs in the domestic steel industry that raises the cost of many products for consumers would be considered which type of project?

Scenario 6-1 The quotation below relates to the following question(s). "The ideal policy, from the viewpoint of the state, is one with identifiable beneficiaries, each of whom is helped appreciably, at the cost of many unidentifiable persons, none of whom is hurt very much." (George Stigler, A Dialogue on the Proper Economic Role of the State ) Refer to Scenario 6-1. This statement is probably

As both the budget and regulatory powers of government grow, public choice analysis indicates that individuals and groups will find it in their interest to

Legislation that offers immediate and easily recognized benefits, at the expense of uncertain costs that are in the distant future (such as financing by government debt), is often enacted even when economic inefficiency results. This can be expected because of

The branch of economics that applies the principles and methodology of economics to the operation of the political process is known as

According to the economic way of thinking, personal benefits and costs influence the actions of

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

Public choice analysis suggests that voters considering whether to vote for a candidate will ask,

Transfer payments are

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

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

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