Question 1

Psychologists note that addicted gamblers typically

Accepted Answer

A) enjoy the activity. 
B) won significant sums their first time at the casino. 
C) lost significant sums their first time at the casino. 
D) win as often as they lose at a casino. 
A) enjoy the activity. 
B) won significant sums their first time at the casino. 
C) lost significant sums their first time at the casino. 
D) win as often as they lose at a casino. B

Question 2

Casino gambling is a different form of entertainment than a movie in that

Accepted Answer

A) you sometimes leave a casino with less money than you came in with. 
B) you sometimes leave a casino with more money than you came in with. 
C) you can get your money back at a casino if you do not have fun. 
D) they are not different at all. 
A) you sometimes leave a casino with less money than you came in with. 
B) you sometimes leave a casino with more money than you came in with. 
C) you can get your money back at a casino if you do not have fun. 
D) they are not different at all. B

Question 3

Which of the following would not be an external cost associated with gambling?

Accepted Answer

A) The increase in homelessness associated with casinos. 
B) The increase in crime near casinos. 
C) The effects on the gamblers' family. 
D) The cost of security at casinos. 
A) The increase in homelessness associated with casinos. 
B) The increase in crime near casinos. 
C) The effects on the gamblers' family. 
D) The cost of security at casinos. D

Question 4

Daily fantasy has its roots in

Accepted Answer

A) rotisserie baseball. 
B) March Madness (NCAA basketball). 
C) Betting on boxing. 
D) UFC. 
A) rotisserie baseball. 
B) March Madness (NCAA basketball). 
C) Betting on boxing. 
D) UFC.

Question 5

The question of legality in daily fantasy comes down to

Accepted Answer

A) whether it is a game of skill or chance. It is usually legal if it is a game of skill. 
B) whether it is a game of skill or chance. It is usually illegal if it is a game of skill. 
C) whether the points system is transparent 
D) how big the bet is. 
A) whether it is a game of skill or chance. It is usually legal if it is a game of skill. 
B) whether it is a game of skill or chance. It is usually illegal if it is a game of skill. 
C) whether the points system is transparent 
D) how big the bet is.

Question 6

The question of legality in daily fantasy comes down to

Accepted Answer

A) whether it is a game of skill or chance. It is usually legal if it is a game of chance. 
B) whether it is a game of skill or chance. It is usually illegal if it is a game of chance. 
C) whether the points system is transparent. 
D) how big the bet is. 
A) whether it is a game of skill or chance. It is usually legal if it is a game of chance. 
B) whether it is a game of skill or chance. It is usually illegal if it is a game of chance. 
C) whether the points system is transparent. 
D) how big the bet is.

Question 7

Unregulated competitive markets for services with negative externalities, such as gambling, tend to establish a price for the service that

Accepted Answer

A) is too low to support efficient use of scarce resources. 
B) is too high to support efficient use of scarce resources. 
C) supports efficient use of scarce resources. 
D) provides a modest stipend for support of recovering addicts. 
A) is too low to support efficient use of scarce resources. 
B) is too high to support efficient use of scarce resources. 
C) supports efficient use of scarce resources. 
D) provides a modest stipend for support of recovering addicts.

Question 8

Traditional sports gambling is legal

Accepted Answer

A) everywhere. 
B) nowhere. 
C) in some states (Nevada, Montana, Delaware, and Oregon)and illegal in others. 
D) as long as it is on the internet. 
A) everywhere. 
B) nowhere. 
C) in some states (Nevada, Montana, Delaware, and Oregon)and illegal in others. 
D) as long as it is on the internet.

Question 9

The question of legality in daily fantasy comes down to whether it is a game of skill or chance. The argument that it is a game of skill is that

Accepted Answer

A) players can use a skillful and statistical understanding of the athletes they are choosing. 
B) players can use the private knowledge that they are hot to time their bets. 
C) players can use the private knowledge that they are cold to avoid making bets. 
D) people with skill have better luck. 
A) players can use a skillful and statistical understanding of the athletes they are choosing. 
B) players can use the private knowledge that they are hot to time their bets. 
C) players can use the private knowledge that they are cold to avoid making bets. 
D) people with skill have better luck.

Question 10

The operating profitability of casinos comes primarily from the fact that

Accepted Answer

A) they typically charge an enormous amount for alcohol. 
B) they typically have a significant cover charge. 
C) the expected value of any gamble (to the gambler)is negative. 
D) the expected value of any gamble (to the casino)is negative. 
A) they typically charge an enormous amount for alcohol. 
B) they typically have a significant cover charge. 
C) the expected value of any gamble (to the gambler)is negative. 
D) the expected value of any gamble (to the casino)is negative.

Question 11

The degree to which a new casino will have an economic impact reflects the potential

Accepted Answer

A) local substitution. 
B) the addictiveness of gambling. 
C) positive externalities. 
D) legislation. 
A) local substitution. 
B) the addictiveness of gambling. 
C) positive externalities. 
D) legislation.

Question 12

U.S. casinos employ about _____ people.

Accepted Answer

A) 37,000 
B) 340,000 
C) 1 million 
D) 10 million 
A) 37,000 
B) 340,000 
C) 1 million 
D) 10 million

Question 13

The city in which a new casino is likely to have the greatest economic impact would be

Accepted Answer

A) Las Vegas (where many already exist). 
B) St. Louis (where three already exist). 
C) Kansas City (where two already exist). 
D) Denton, TX (north of Dallas, where no casinos already exist). 
A) Las Vegas (where many already exist). 
B) St. Louis (where three already exist). 
C) Kansas City (where two already exist). 
D) Denton, TX (north of Dallas, where no casinos already exist).

Question 14

Gambling is profitable to casinos because the expected payoff of every gamble (to the gambler)is ______ the amount gambled.

Accepted Answer

A) equal to 
B) greater than 
C) less than 
D) unrelated to 
A) equal to 
B) greater than 
C) less than 
D) unrelated to

Question 15

U.S. casinos serve about ____ people per year.

Accepted Answer

A) 1 million 
B) 5 million 
C) 76 million 
D) 250 million 
A) 1 million 
B) 5 million 
C) 76 million 
D) 250 million

Question 16

Economists can accept limits on gambling because

Accepted Answer

A) addiction psychology distorts the gambler's ability to make rational choices. 
B) gamblers impose costs on innocent third parties. 
C) no one wins in gambling. 
D) addiction psychology distorts the gambler's ability to make rational choices and gamblers impose costs to innocent third parties. 
A) addiction psychology distorts the gambler's ability to make rational choices. 
B) gamblers impose costs on innocent third parties. 
C) no one wins in gambling. 
D) addiction psychology distorts the gambler's ability to make rational choices and gamblers impose costs to innocent third parties.

Question 17

Suppose you are debating a proponent of casino gambling and they note that casinos themselves pay significant state and local taxes, your response could be

Accepted Answer

A) casinos actually pay only federal taxes. 
B) casinos pay no taxes. 
C) the revenue mostly displaces taxes that would have been paid by others anyway. 
D) the tax rate on gambling profits is less than on restaurant profits. 
A) casinos actually pay only federal taxes. 
B) casinos pay no taxes. 
C) the revenue mostly displaces taxes that would have been paid by others anyway. 
D) the tax rate on gambling profits is less than on restaurant profits.

Question 18

Economic estimates of a "modest upside" to casino gambling suggest that the "local substitution" is

Accepted Answer

A) zero. 
B) nearly, but not totally, complete. 
C) slight. 
D) complete. 
A) zero. 
B) nearly, but not totally, complete. 
C) slight. 
D) complete.

Question 19

If you compute the odds of winning and losing, the casinos

Accepted Answer

A) breakeven. 
B) lose a small percentage. 
C) win a small percentage. 
D) lose a large percentage. 
A) breakeven. 
B) lose a small percentage. 
C) win a small percentage. 
D) lose a large percentage.

Question 20

Economists generally do not agree to limit the private and voluntary actions of people, but in the case of gambling, economists will admit that gambling

Accepted Answer

A) is fun. 
B) teaches people about statistics. 
C) has external costs, so regulation could be justified for that reason. 
D) is immoral, so it must be prohibited. 
A) is fun. 
B) teaches people about statistics. 
C) has external costs, so regulation could be justified for that reason. 
D) is immoral, so it must be prohibited.

Exam 47: The Economic Impact of Casino Gambling

Psychologists note that addicted gamblers typically

Casino gambling is a different form of entertainment than a movie in that

Which of the following would not be an external cost associated with gambling?

Daily fantasy has its roots in

The question of legality in daily fantasy comes down to

The question of legality in daily fantasy comes down to

Unregulated competitive markets for services with negative externalities, such as gambling, tend to establish a price for the service that

Traditional sports gambling is legal

The question of legality in daily fantasy comes down to whether it is a game of skill or chance. The argument that it is a game of skill is that

The operating profitability of casinos comes primarily from the fact that

The degree to which a new casino will have an economic impact reflects the potential

U.S. casinos employ about _____ people.

The city in which a new casino is likely to have the greatest economic impact would be

Gambling is profitable to casinos because the expected payoff of every gamble (to the gambler)is ______ the amount gambled.

U.S. casinos serve about ____ people per year.

Economists can accept limits on gambling because

Suppose you are debating a proponent of casino gambling and they note that casinos themselves pay significant state and local taxes, your response could be

Economic estimates of a "modest upside" to casino gambling suggest that the "local substitution" is

If you compute the odds of winning and losing, the casinos

Economists generally do not agree to limit the private and voluntary actions of people, but in the case of gambling, economists will admit that gambling

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