Question 1

Which of the following are problems that must be overcome to achieve the Lindahl solution?

Accepted Answer

A)  Individuals tend to overreport their valuation of a public good. 
B)  Individuals may not know their valuation of a public good. 
C)  Individual values cannot be aggregated into a social value. 
D)  Individuals demand larger quantities of a public good when their tax shares increase. 
A)  Individuals tend to overreport their valuation of a public good. 
B)  Individuals may not know their valuation of a public good. 
C)  Individual values cannot be aggregated into a social value. 
D)  Individuals demand larger quantities of a public good when their tax shares increase. B

Question 2

Which of the following is legislation or a constitutional amendment that citizens place on the ballot?

Accepted Answer

A)  recall 
B)  referendum 
C)  voter initiative 
D)  arrow vote 
A)  recall 
B)  referendum 
C)  voter initiative 
D)  arrow vote C

Question 3

Which of the following is TRUE of median voter outcomes?

Accepted Answer

A)  They are socially efficient. 
B)  They are never socially efficient. 
C)  They do not reflect the intensity of voters' preferences. 
D)  They are the same outcomes that would prevail without government intervention. 
A)  They are socially efficient. 
B)  They are never socially efficient. 
C)  They do not reflect the intensity of voters' preferences. 
D)  They are the same outcomes that would prevail without government intervention. C

Question 4

There is an election with three candidates: Lady Left (LL),Carrie Central (CC),and Robert Right (RR).The following are the outcomes in various two- and three-way races:
CC,100%; RR,0%
LL,0%; CC,100%
RR,51%; LL,49%
RR,35%; LL,33%; CC,32%
The voting system is such that first there is a three-way race.Then,if none of the three candidates wins more than 50% of the votes,there is a two-way runoff election between the two candidates who won the most votes.
Is this voting system consistent? Explain which property of consistency is violated,if any.

Accepted Answer

Everyone prefers Carrie Central to eithe

Question 5

Federal spending for local projects that serve mostly to transfer federal dollars to politician's constituents is defined as:

Accepted Answer

A)  direct democracy. 
B)  political pork. 
C)  marginal-cost pricing. 
D)  Lindahl pricing. 
A)  direct democracy. 
B)  political pork. 
C)  marginal-cost pricing. 
D)  Lindahl pricing.

Question 6

Which of the following refers to taxing individuals for a public good according to their valuation of the benefit they receive from the good?

Accepted Answer

A)  efficient-cost taxation 
B)  benefit taxation 
C)  median voter taxation 
D)  mean voter taxation 
A)  efficient-cost taxation 
B)  benefit taxation 
C)  median voter taxation 
D)  mean voter taxation

Question 7

Suppose Dexter and Amy are the only members of a community that is trying to determine how much of the public good should be produced.Dexter's (inverse)demand curve is given by P = 50 - 5Q,while Amy's (inverse)demand curve is given by P = 150 - 15Q,where P is price or marginal benefit and Q is the quantity of the good.The marginal cost of producing the public good is constant at $80.Amy will vote for the efficient quantity of the public good if the price to her is:

Accepted Answer

A)  $20. 
B)  $40. 
C)  $60. 
D)  $80. 
A)  $20. 
B)  $40. 
C)  $60. 
D)  $80.

Question 8

Which statement about direct democracy in the United States is NOT true?

Accepted Answer

A)  The important feature of a referendum is that it is designed to elicit constituents' reactions to legislation. 
B)  At the local level,the town meeting remains an important venue for decision making in many southern states. 
C)  Voter initiative is widely used in the United States,especially in West Coast states. 
D)  Referenda and initiatives are used for all kinds of issues,including but not limited to election rules,alcohol rules,animal rights,and so on. 
A)  The important feature of a referendum is that it is designed to elicit constituents' reactions to legislation. 
B)  At the local level,the town meeting remains an important venue for decision making in many southern states. 
C)  Voter initiative is widely used in the United States,especially in West Coast states. 
D)  Referenda and initiatives are used for all kinds of issues,including but not limited to election rules,alcohol rules,animal rights,and so on.

Question 9

The property of the independence of irrelevant alternatives refers to which of the following?

Accepted Answer

A)  If voters for one choice feel more strongly than do voters for another choice,then the aggregation mechanism must be such that the choices are weighted accordingly. 
B)  If one choice is preferred by all voters,then the aggregation mechanism must be such that this choice is made by society. 
C)  If choice A is preferred to choice B and choice B is preferred to choice C,then A must be preferred to C. 
D)  Choices must satisfy the condition that if one choice is preferred to another,then the introduction of a third choice will not change that ranking. 
A)  If voters for one choice feel more strongly than do voters for another choice,then the aggregation mechanism must be such that the choices are weighted accordingly. 
B)  If one choice is preferred by all voters,then the aggregation mechanism must be such that this choice is made by society. 
C)  If choice A is preferred to choice B and choice B is preferred to choice C,then A must be preferred to C. 
D)  Choices must satisfy the condition that if one choice is preferred to another,then the introduction of a third choice will not change that ranking.

Question 10

Pam and Kunal are the only members of a community that is trying to determine how much of the public good should be produced.Suppose that Pam is willing to pay $10 for the fourth unit of the public good and that Kunal is willing to pay $6 for the fourth unit.The marginal cost of producing the public good is constant at $4.Which of the following is TRUE?

Accepted Answer

A)  Fewer than four units of the public good should be produced. 
B)  More than four units of the public good should be produced. 
C)  Exactly four units of the public good should be produced. 
D)  The Lindahl equilibrium is established when the price of the public good is $10. 
A)  Fewer than four units of the public good should be produced. 
B)  More than four units of the public good should be produced. 
C)  Exactly four units of the public good should be produced. 
D)  The Lindahl equilibrium is established when the price of the public good is $10.

Question 11

Which of the following are problems that must be overcome to achieve the Lindahl solution?

Accepted Answer

A)  Individuals always tell the truth about their willingness to pay. 
B)  Individuals tend to overreport their valuation of a public good. 
C)  Individuals tend to underreport their valuation of a public good. 
D)  The tax system may be inefficient. 
A)  Individuals always tell the truth about their willingness to pay. 
B)  Individuals tend to overreport their valuation of a public good. 
C)  Individuals tend to underreport their valuation of a public good. 
D)  The tax system may be inefficient.

Question 12

According to the median voter model,which of the following must a politician know in order to attract the maximum number of votes?

Accepted Answer

A)  the preferences of all voters 
B)  the preferences of the median voter 
C)  voters' willingness to pay 
D)  the issue that is most important to all voters 
A)  the preferences of all voters 
B)  the preferences of the median voter 
C)  voters' willingness to pay 
D)  the issue that is most important to all voters

Question 13

Suppose Dexter and Amy are the only members of a community that is trying to determine how much of the public good should be produced.Dexter's (inverse)demand curve is given by P = 50 - 5Q,while Amy's (inverse)demand curve is given by P = 150 - 15Q,where P is price or marginal benefit and Q is the quantity of the good.The marginal cost of producing the public good is constant at $80.Dexter will vote for the efficient quantity of the public good if the price to him is:

Accepted Answer

A)  $20. 
B)  $40. 
C)  $60. 
D)  $80. 
A)  $20. 
B)  $40. 
C)  $60. 
D)  $80.

Question 14

How can a voting model avoid the result of Arrow's Impossibility Theorem?

Accepted Answer

A)  impose restrictions on preferences 
B)  remove the irrational voters 
C)  prohibit a dictatorship 
D)  allow individuals to vote according to their personal preferences 
A)  impose restrictions on preferences 
B)  remove the irrational voters 
C)  prohibit a dictatorship 
D)  allow individuals to vote according to their personal preferences

Question 15

In a Lindahl equilibrium:

Accepted Answer

A)  no one could be made better off by reducing his or her tax burden,all things equal. 
B)  most but not all individuals are happy to pay their taxes to receive the benefits. 
C)  the government must subsidize the project by using nontax financing schemes. 
D)  everyone is willing to pay the taxes to receive the benefits. 
A)  no one could be made better off by reducing his or her tax burden,all things equal. 
B)  most but not all individuals are happy to pay their taxes to receive the benefits. 
C)  the government must subsidize the project by using nontax financing schemes. 
D)  everyone is willing to pay the taxes to receive the benefits.

Question 16

A voting system characterized by the dominance property,the property of transitivity,and independence of irrelevant alternatives would lead to:

Accepted Answer

A)  a violation of Arrow's Impossibility Theorem. 
B)  a dictatorship. 
C)  inconsistent aggregation of individual preferences. 
D)  consistent aggregation of individual preferences. 
A)  a violation of Arrow's Impossibility Theorem. 
B)  a dictatorship. 
C)  inconsistent aggregation of individual preferences. 
D)  consistent aggregation of individual preferences.

Question 17

Suppose you hear that the U.S.Department of Agriculture is more interested in preserving itself than in achieving its designated mission.That statement is consistent with:

Accepted Answer

A)  goods being provided more efficiently by the private sector than by the public sector. 
B)  government corruption. 
C)  the political business cycle. 
D)  size-maximizing bureaucracy. 
A)  goods being provided more efficiently by the private sector than by the public sector. 
B)  government corruption. 
C)  the political business cycle. 
D)  size-maximizing bureaucracy.

Question 18

Discuss the recent experiences of the U.S.defense industry in contracting out without competitive bidding.Are they successful ventures? What might be the fundamental problem in these contracts?

Accepted Answer

Contracting out is much more likely to d

Question 19

Which of the following is a ballot measure that allows citizens to vote on state laws or constitutional amendments that have already been passed by the state legislature?

Accepted Answer

A)  recall 
B)  referendum 
C)  voter initiative 
D)  arrow vote 
A)  recall 
B)  referendum 
C)  voter initiative 
D)  arrow vote

Question 20

Suppose Dexter and Amy are the only members of a community that is trying to determine how much of the public good should be produced.Dexter's (inverse)demand curve is given by P = 50 - 5Q,while Amy's (inverse)demand curve is given by P = 150 - 15Q,where P is price or marginal benefit and Q is the quantity of the good.The marginal cost of producing the public good is constant at $80.Setting aggregate marginal benefit equal to marginal cost leads to the conclusion that the efficient quantity of the public good is equal to:

Accepted Answer

A) 2 
B) 6 
C) 10 
D) 80. 
A) 2 
B) 6 
C) 10 
D) 80.

Which of the following are problems that must be overcome to achieve the Lindahl solution?

Which of the following is legislation or a constitutional amendment that citizens place on the ballot?

Which of the following is TRUE of median voter outcomes?

Federal spending for local projects that serve mostly to transfer federal dollars to politician's constituents is defined as:

Which of the following refers to taxing individuals for a public good according to their valuation of the benefit they receive from the good?

Which statement about direct democracy in the United States is NOT true?

The property of the independence of irrelevant alternatives refers to which of the following?

Which of the following are problems that must be overcome to achieve the Lindahl solution?

According to the median voter model,which of the following must a politician know in order to attract the maximum number of votes?

How can a voting model avoid the result of Arrow's Impossibility Theorem?

In a Lindahl equilibrium:

A voting system characterized by the dominance property,the property of transitivity,and independence of irrelevant alternatives would lead to:

Suppose you hear that the U.S.Department of Agriculture is more interested in preserving itself than in achieving its designated mission.That statement is consistent with:

Discuss the recent experiences of the U.S.defense industry in contracting out without competitive bidding.Are they successful ventures? What might be the fundamental problem in these contracts?

Which of the following is a ballot measure that allows citizens to vote on state laws or constitutional amendments that have already been passed by the state legislature?

Why Study Public Finance

Theoretical Tools of Public Finance

Empirical Tools of Public Finance

Budget Analysis and Deficit Financing

Externalities- Problems and Solutions

Externalities in Action- Environmental and Health Externalities

Public Goods

Cost-Benefit Analysis

State and Local Government Expenditures

Education

Social Insurance- the New Function of Government

Social Security

Unemployment Insurance, disability Insurance, and Workers Compensation

Health Insurance I- Health Economics and Private Health Insurance

Health Insurance Ii- Medicare, medicaid, and Health Care Reform

Income Distribution and Welfare Programs

Taxation- How It Works and What It Means

The Equity Implications of Taxation- Tax Incidence

Taxes on Labor Supply

Taxes on Savings

Taxes on Risk Taking and Wealth

Taxation of Business Income

Fundamental Tax Reform and Consumption Tax

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Exam 9: Political Economy

Which of the following are problems that must be overcome to achieve the Lindahl solution?

Which of the following is legislation or a constitutional amendment that citizens place on the ballot?

Which of the following is TRUE of median voter outcomes?

Federal spending for local projects that serve mostly to transfer federal dollars to politician's constituents is defined as:

Which of the following refers to taxing individuals for a public good according to their valuation of the benefit they receive from the good?

Which statement about direct democracy in the United States is NOT true?

The property of the independence of irrelevant alternatives refers to which of the following?

Which of the following are problems that must be overcome to achieve the Lindahl solution?

According to the median voter model,which of the following must a politician know in order to attract the maximum number of votes?

How can a voting model avoid the result of Arrow's Impossibility Theorem?

In a Lindahl equilibrium:

A voting system characterized by the dominance property,the property of transitivity,and independence of irrelevant alternatives would lead to:

Suppose you hear that the U.S.Department of Agriculture is more interested in preserving itself than in achieving its designated mission.That statement is consistent with:

Discuss the recent experiences of the U.S.defense industry in contracting out without competitive bidding.Are they successful ventures? What might be the fundamental problem in these contracts?

Which of the following is a ballot measure that allows citizens to vote on state laws or constitutional amendments that have already been passed by the state legislature?

Why Study Public Finance

Theoretical Tools of Public Finance

Empirical Tools of Public Finance

Budget Analysis and Deficit Financing

Externalities- Problems and Solutions

Externalities in Action- Environmental and Health Externalities

Public Goods

Cost-Benefit Analysis

State and Local Government Expenditures

Education

Social Insurance- the New Function of Government

Social Security

Unemployment Insurance, disability Insurance, and Workers Compensation

Health Insurance I- Health Economics and Private Health Insurance

Health Insurance Ii- Medicare, medicaid, and Health Care Reform

Income Distribution and Welfare Programs

Taxation- How It Works and What It Means

The Equity Implications of Taxation- Tax Incidence

Taxes on Labor Supply

Taxes on Savings

Taxes on Risk Taking and Wealth

Taxation of Business Income

Fundamental Tax Reform and Consumption Tax

Filters