Question 1

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that friends Jennifer,Stephanie,and Megan cannot agree on how much to spend for a bouquet of flowers to send to a person that allowed them to use their beach house for the weekend.Jennifer wants to buy a moderately priced bouquet,Stephanie wants to buy an expensive bouquet,and Megan wants to buy a very expensive bouquet.Assuming no paradox of voting,majority voting will result in the decision to buy:

Accepted Answer

A)  an inexpensive bouquet. 
B)  a very expensive bouquet. 
C)  a moderately priced bouquet. 
D)  an expensive bouquet. 
A)  an inexpensive bouquet. 
B)  a very expensive bouquet. 
C)  a moderately priced bouquet. 
D)  an expensive bouquet.

Question 3

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Accepted Answer

A)  principal-agent problem. 
B)  benefits-received principle. 
C)  median-voter model. 
D)  paradox of voting. 
A)  principal-agent problem. 
B)  benefits-received principle. 
C)  median-voter model. 
D)  paradox of voting.

Question 4

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

Accepted Answer

A) True 
 B)False

Question 5

In corporations,owners are __________________ and managers are ________________.

Accepted Answer

A)  agents;principals 
B)  stockholders;bondholders 
C)  agents;employees 
D)  principals;agents 
A)  agents;principals 
B)  stockholders;bondholders 
C)  agents;employees 
D)  principals;agents

Question 6

The government of Southland wants to improve resource allocation in the country.Which of the following actions by the Southland government is most likely to accomplish this?

Accepted Answer

A)  Weakening enforcement of laws and contracts. 
B)  Promising to cover every risk of loss for private firms. 
C)  Coercing all firms to innovate and invest. 
D)  Taxing polluters and subsidizing firms that are creating significant positive externalities. 
A)  Weakening enforcement of laws and contracts. 
B)  Promising to cover every risk of loss for private firms. 
C)  Coercing all firms to innovate and invest. 
D)  Taxing polluters and subsidizing firms that are creating significant positive externalities.

Question 7

Government fiscal policy involves changing which of the following?

Accepted Answer

A)  Interest rates. 
B)  Taxes and government spending. 
C)  Regulations on business. 
D)  The amount of money in circulation. 
A)  Interest rates. 
B)  Taxes and government spending. 
C)  Regulations on business. 
D)  The amount of money in circulation.

Question 8

The unlawful misdirection of governmental resources for personal gain is known as:

Accepted Answer

A)  political corruption. 
B)  logrolling. 
C)  adverse selection. 
D)  the special-interest effect. 
A)  political corruption. 
B)  logrolling. 
C)  adverse selection. 
D)  the special-interest effect.

Question 9

Fiscal policy is more susceptible to politicization than monetary policy.

Accepted Answer

A) True 
 B)False

Question 10

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project.This is an example of:

Accepted Answer

A)  logrolling. 
B)  the paradox of voting. 
C)  the principal-agent problem. 
D)  the median voter model. 
A)  logrolling. 
B)  the paradox of voting. 
C)  the principal-agent problem. 
D)  the median voter model.

Question 11

The government's ability to coerce can enhance economic efficiency by:

Accepted Answer

A)  eliminating income inequality. 
B)  correcting market failures. 
C)  preventing resources from going to their most valued uses. 
D)  restraining self-interest. 
A)  eliminating income inequality. 
B)  correcting market failures. 
C)  preventing resources from going to their most valued uses. 
D)  restraining self-interest.

Question 12

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

Accepted Answer

A)  fiscal policy 
B)  monetary policy 
C)  unfunded liabilities 
D)  budget deficits 
A)  fiscal policy 
B)  monetary policy 
C)  unfunded liabilities 
D)  budget deficits

Question 13

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

Accepted Answer

A) True 
 B)False

Question 14

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Accepted Answer

A)  the paradox of voting. 
B)  logrolling. 
C)  the benefits-received principle. 
D)  adverse selection. 
A)  the paradox of voting. 
B)  logrolling. 
C)  the benefits-received principle. 
D)  adverse selection.

Question 15

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Accepted Answer

A)  paradox of voting. 
B)  median-voter model. 
C)  law of diminishing marginal utility. 
D)  ability-to-pay principle. 
A)  paradox of voting. 
B)  median-voter model. 
C)  law of diminishing marginal utility. 
D)  ability-to-pay principle.

Question 16

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

Accepted Answer

A)  moral hazard. 
B)  the principal-agent problem. 
C)  logrolling. 
D)  rent-seeking behavior. 
A)  moral hazard. 
B)  the principal-agent problem. 
C)  logrolling. 
D)  rent-seeking behavior.

Question 17

The field of economics that analyzes government decision making,politics,and elections is called:

Accepted Answer

A)  public finance. 
B)  public choice theory. 
C)  collective economics. 
D)  political economy. 
A)  public finance. 
B)  public choice theory. 
C)  collective economics. 
D)  political economy.

Question 18

"Government failure" is a prominent topic in:

Accepted Answer

A)  public choice theory. 
B)  Keynesian economics. 
C)  socialist theory. 
D)  behavioral economics. 
A)  public choice theory. 
B)  Keynesian economics. 
C)  socialist theory. 
D)  behavioral economics.

Question 19

Changes in tax rates are a form of monetary policy.

Accepted Answer

A) True 
 B)False

Question 20

(Consider This)Which of the following is an example of voter failure?

Accepted Answer

A)  Voters support adding stop lights that would increase congestion and travel costs without increasing safety or convenience. 
B)  Government officials ignore voter calls for regulations that would reduce negative externalities and enhance efficiency. 
C)  Voters wanting greater highway safety are unable to express their preferences on how to achieve it because the voting system doesn't allow it. 
D)  Voters wanting more government services are divided on what services they most prefer,leaving government officials to determine what is best. 
A)  Voters support adding stop lights that would increase congestion and travel costs without increasing safety or convenience. 
B)  Government officials ignore voter calls for regulations that would reduce negative externalities and enhance efficiency. 
C)  Voters wanting greater highway safety are unable to express their preferences on how to achieve it because the voting system doesn't allow it. 
D)  Voters wanting more government services are divided on what services they most prefer,leaving government officials to determine what is best.

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

In corporations,owners are __ and managers are .

The government of Southland wants to improve resource allocation in the country.Which of the following actions by the Southland government is most likely to accomplish this?

Government fiscal policy involves changing which of the following?

The unlawful misdirection of governmental resources for personal gain is known as:

Fiscal policy is more susceptible to politicization than monetary policy.

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project.This is an example of:

The government's ability to coerce can enhance economic efficiency by:

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

The field of economics that analyzes government decision making,politics,and elections is called:

"Government failure" is a prominent topic in:

Changes in tax rates are a form of monetary policy.

(Consider This)Which of the following is an example of voter failure?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 5: Governments Role and Government Failure

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

In corporations,owners are __________________ and managers are ________________.

The government of Southland wants to improve resource allocation in the country.Which of the following actions by the Southland government is most likely to accomplish this?

Government fiscal policy involves changing which of the following?

The unlawful misdirection of governmental resources for personal gain is known as:

Fiscal policy is more susceptible to politicization than monetary policy.

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project.This is an example of:

The government's ability to coerce can enhance economic efficiency by:

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

The field of economics that analyzes government decision making,politics,and elections is called:

"Government failure" is a prominent topic in:

Changes in tax rates are a form of monetary policy.

(Consider This)Which of the following is an example of voter failure?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

In corporations,owners are __ and managers are .