Exam 5: Public Spending and Public Choice

An externality exists when

Establishing rules for voter registration is an example of a(n)

What is one result of the Medicare subsidy?

What effect have Medicare subsidies had on the consumption of medical services?

"Second-hand" smoke, an often cited disadvantage of allowing smoking in restaurants, is referred to in economics as a(n)

The Employment Act of 1946 reflects which one of the following functions of government?

Explain why an external benefit leads to an under-allocation of resources to the production of a good.

In the U.S. economy, which of the following is NOT a generally accepted economic function of government?

-In the above figure, market equilibrium at point E yields the quantity X. The quantity is the socially optimal quantity. Point E indicates that currently there is

-In the above figure, market equilibrium at point E yields the quantity X. The quantity is socially optimal amount. The government can achieve the optimal outcome by

Under present U.S. law, cocaine is an example of

What are the three goals of the Employment Act of 1946?

Public schools

External costs can be defined as

When misallocation of resources for production of a good results in spillover effects on third parties, there is a

-Refer to the above figure. An external cost exists. The amount of that cost is represented by

If public subsidies for education were eliminated, what would you expect as an outcome in the market for educational services?

Which of the following is FALSE about public-sector decision making?

A shift from S₁ to S₂ reflects the change that happens when a negative externality is taken into account. A shift from D₁ to D₂ reflects the change that happens when a positive externality is taken into account. -Refer to the above figures. A positive externality exists that has not been corrected. Price and quantity will be

Which of the following legal subjects is most concerned with the economic function of the legal system?