Question 1

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

Accepted Answer

A) When voters pay in proportion to benefits received,all voters will gain if the government activity is productive. 
B) If a majority opposes an activity,it must be counterproductive. 
C) When voters must pay in proportion to benefits received for an activity undertaken by the government,the activity will most likely be rejected by the majority of voters. 
D) Government activities must be productive in order to be eligible for vote. 
A) When voters pay in proportion to benefits received,all voters will gain if the government activity is productive. 
B) If a majority opposes an activity,it must be counterproductive. 
C) When voters must pay in proportion to benefits received for an activity undertaken by the government,the activity will most likely be rejected by the majority of voters. 
D) Government activities must be productive in order to be eligible for vote.

Question 2

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 3

Public choice theory assumes voters,politicians,and other individuals in the public sector are largely motivated by

Accepted Answer

A) a desire to promote the general welfare. 
B) a desire to meet the conditions of economic efficiency for the economy as a whole. 
C) altruism or the good of the public as a whole. 
D) personal self-interest. 
A) a desire to promote the general welfare. 
B) a desire to meet the conditions of economic efficiency for the economy as a whole. 
C) altruism or the good of the public as a whole. 
D) personal self-interest.

Question 4

Despite many differences,the market and public sectors are similar in which one of the following respects?

Accepted Answer

A) In both sectors,income (or power)is distributed on the basis of the same criterion. 
B) Consumers in the market sector and voters in the public sector are equally well informed. 
C) Voluntary exchange,rather than compulsion,is characteristic of both sectors. 
D) It will be costly to use scarce goods,whether through the private or the public sector. 
A) In both sectors,income (or power)is distributed on the basis of the same criterion. 
B) Consumers in the market sector and voters in the public sector are equally well informed. 
C) Voluntary exchange,rather than compulsion,is characteristic of both sectors. 
D) It will be costly to use scarce goods,whether through the private or the public sector.

Question 5

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

Accepted Answer

A) constitutional rules 
B) the shortsightedness effect 
C) the special-interest effect 
D) public goods 
A) constitutional rules 
B) the shortsightedness effect 
C) the special-interest effect 
D) public goods

Question 6

When is representative democracy most likely to lead to the adoption of an inefficient government program?

Accepted Answer

A) when the program provides substantial benefits to a small proportion of voters and the costs are widespread among voters 
B) when both the benefits and costs of the program are widespread among voters 
C) when the program is financed by a user charge 
D) when a close relationship exists between the personal benefits received from the program and the tax cost imposed on each voter 
A) when the program provides substantial benefits to a small proportion of voters and the costs are widespread among voters 
B) when both the benefits and costs of the program are widespread among voters 
C) when the program is financed by a user charge 
D) when a close relationship exists between the personal benefits received from the program and the tax cost imposed on each voter

Question 7

Payments that users (consumers)are required to make if they want to receive certain services provided by the government are called

Accepted Answer

A) tax deductions. 
B) transfer payments. 
C) user charges. 
D) sales taxes. 
A) tax deductions. 
B) transfer payments. 
C) user charges. 
D) sales taxes.

Question 8

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 9

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) disorganized individuals to well-organized special interest groups. 
C) middle-income taxpayers to both the rich and the poor. 
D) well-organized business and labor groups to consumers. 
A) the rich to the poor. 
B) disorganized individuals to well-organized special interest groups. 
C) middle-income taxpayers to both the rich and the poor. 
D) well-organized business and labor groups to consumers.

Question 10

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 11

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 12

Special-interest legislation is characterized by

Accepted Answer

A) concentrated costs and concentrated benefits 
B) concentrated benefits and widespread costs 
C) widespread benefits and widespread costs 
D) widespread benefits and concentrated costs 
E) zero costs 
A) concentrated costs and concentrated benefits 
B) concentrated benefits and widespread costs 
C) widespread benefits and widespread costs 
D) widespread benefits and concentrated costs 
E) zero costs

Question 13

Economic theory leads us to expect that the typical voter will be uninformed on many issues because

Accepted Answer

A) most issues are so complex that voters will be unable to understand them. 
B) even though information is free,most voters do not care. 
C) information is costly,and the individual voter casting a well-informed vote can expect negligible personal benefit. 
D) citizen apathy about political matters is inevitable,except when decisions are made by referendum. 
A) most issues are so complex that voters will be unable to understand them. 
B) even though information is free,most voters do not care. 
C) information is costly,and the individual voter casting a well-informed vote can expect negligible personal benefit. 
D) citizen apathy about political matters is inevitable,except when decisions are made by referendum.

Question 14

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 types of projects would government action most likely work well,undertaking only efficient projects and rejecting inefficient ones?

Accepted Answer

A) types A and B 
B) types B and D 
C) types B and C 
D) types A and D 
A) types A and B 
B) types B and D 
C) types B and C 
D) types A and D

Question 15

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 16

The rational-ignorance effect is a result of

Accepted Answer

A) externalities that lead to an excess supply of information. 
B) the limited incentive of the news media to cover political campaigns. 
C) the expectation of individual voters that their vote will not be decisive. 
D) the lack of a college education on the part of most voters in the United States. 
A) externalities that lead to an excess supply of information. 
B) the limited incentive of the news media to cover political campaigns. 
C) the expectation of individual voters that their vote will not be decisive. 
D) the lack of a college education on the part of most voters in the United States.

Question 17

Ginny is the owner of a small business,and she is 35 years old.She doesn't smoke cigarettes,and she often spends her weekends with her family camping at the local Greentree state park.According to public choice theory,which of the following four politicians for a public office would Ginny be most likely to vote for in the upcoming election?

Accepted Answer

A) Politician A proposes increasing the tax on small businesses and using the money to provide additional benefits for the elderly. 
B) Politician B proposes increasing the tax on small businesses and using the money to improve the camping facilities at Greentree state park. 
C) Politician C proposes increasing the excise tax on cigarettes and using the money to improve the camping facilities at Greentree state park. 
D) Politician D proposes increasing the excise tax on cigarettes and using the money to provide additional benefits for the elderly. 
A) Politician A proposes increasing the tax on small businesses and using the money to provide additional benefits for the elderly. 
B) Politician B proposes increasing the tax on small businesses and using the money to improve the camping facilities at Greentree state park. 
C) Politician C proposes increasing the excise tax on cigarettes and using the money to improve the camping facilities at Greentree state park. 
D) Politician D proposes increasing the excise tax on cigarettes and using the money to provide additional benefits for the elderly.

Question 18

Of all government spending in the United States,what amount occurs at the federal level?

Accepted Answer

A) less than 10 percent 
B) about half 
C) about three-fifths 
D) more than 90 percent 
A) less than 10 percent 
B) about half 
C) about three-fifths 
D) more than 90 percent

Question 19

A politician may be considered an entrepreneur in the sense that

Accepted Answer

A) he is always open to bribery. 
B) identical personal characteristics are necessary for success in politics and in business. 
C) the successful politician discovers and offers voters political goods when voter demand is strong for him. 
D) like the businessman,the politician selfishly attempts to gain at the expense of his customers. 
A) he is always open to bribery. 
B) identical personal characteristics are necessary for success in politics and in business. 
C) the successful politician discovers and offers voters political goods when voter demand is strong for him. 
D) like the businessman,the politician selfishly attempts to gain at the expense of his customers.

Question 20

Which of the following is true?

Accepted Answer

A) When the government undertakes an activity,we can be assured that all voters will gain. 
B) If a government activity is favored by most citizens,it must be productive. 
C) If most voters oppose a government activity,it must be counterproductive. 
D) When voters pay in proportion to benefits received,all voters will gain if the government activity is productive. 
A) When the government undertakes an activity,we can be assured that all voters will gain. 
B) If a government activity is favored by most citizens,it must be productive. 
C) If most voters oppose a government activity,it must be counterproductive. 
D) When voters pay in proportion to benefits received,all voters will gain if the government activity is productive.

Exam 6: The Economics of Collective Decision-Making

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

Public choice theory assumes voters,politicians,and other individuals in the public sector are largely motivated by

Despite many differences,the market and public sectors are similar in which one of the following respects?

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

When is representative democracy most likely to lead to the adoption of an inefficient government program?

Payments that users (consumers)are required to make if they want to receive certain services provided by the government are called

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

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

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?

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

Special-interest legislation is characterized by

Economic theory leads us to expect that the typical voter will be uninformed on many issues because

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

The rational-ignorance effect is a result of

Of all government spending in the United States,what amount occurs at the federal level?

A politician may be considered an entrepreneur in the sense that

Which of the following is true?

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-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

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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