Exam 5: Governments Role and Government Failure

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community. No vote trading is allowed. If the tax cost of this proposed project is $300 per person, a majority vote will

Interest groups result when people

The concept of limited and bundled choice, as used in public choice theory, refers to the fact that

Nobody gains from pork-barrel politics other than the politicians.

Proponents of deregulation point to all of the following industries as examples of successful deregulation except for

In presidential elections, voters often find that they do not agree with any single candidate on all the issues that matter to them (the voters). This is known as the

The "pork" in pork-barrel politics refers to government projects that politicians try to secure in favor of the common good for the whole nation.

Economists widely support deregulation of industries that tend toward monopoly or generate substantial negative externalities.

If a public good provides social benefits that are greater than its costs, then the majority of voters would always vote in favor of producing the good.

Public choice economists

What is a likely explanation for why the budget of a government agency might increase beyond its optimal size?

Special-interest groups result from people with strong preferences on a particular issue banding together to let policymakers know their preferences and could thereby lead to efficient outcomes.

Government in a market system can increase economic efficiency by collecting taxes in order to subsidize the production of

When politicians support policies such as imposing punitive tariffs on imports, which are popular among voters but which also reduce economic efficiency, we refer to this as

Which of the following is a key difference between the economic activities of government and those of private firms?

Deregulation of an industry will always lead to an improvement in economic efficiency.

The idea of government failure includes all of the following except

Majority voting produces efficient outcomes because it takes into account the strength of the preferences of individual voters.

In what way, if any, does the invisible hand affect government resource allocation?

The situation where "the few who yell the loudest get heard" is referred to as the