Question 1

Which of the following government programs is the largest in terms of spending?

Accepted Answer

A)  health care 
B)  defense 
C)  foreign aid 
D)  welfare 
A)  health care 
B)  defense 
C)  foreign aid 
D)  welfare B

Question 2

The free flow of ideas helps both the market and government to function better.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following statements is TRUE? I.Increased newspaper circulation is associated with better and quicker political responses to a crisis in food availability.
II.Governments will provide higher levels of food distribution when there is more political competition.
III.Amartya Sen claims that no famine has ever taken place in a functioning democracy.

Accepted Answer

A)  I only 
B)  II only 
C)  I,II,and III 
D)  II and III only 
A)  I only 
B)  II only 
C)  I,II,and III 
D)  II and III only C

Question 4

Evidence suggests that voters are myopic,meaning they are responsive to economic conditions:

Accepted Answer

A)  before the year of an election. 
B)  in the year of an election. 
C)  after the year of an election. 
D)  over the president's entire term. 
A)  before the year of an election. 
B)  in the year of an election. 
C)  after the year of an election. 
D)  over the president's entire term.

Question 5

The main reason that government legislation on sugar quotas passes is that:

Accepted Answer

A)  a large number of consumers bear small economic costs while a small number of domestic sugar producers receive its benefits. 
B)  a small number of consumers bear its economic costs while a large number of domestic sugar producers receive its benefits. 
C)  its economic benefits totally offset its economic costs. 
D)  both consumers and producers are rationally ignorant. 
A)  a large number of consumers bear small economic costs while a small number of domestic sugar producers receive its benefits. 
B)  a small number of consumers bear its economic costs while a large number of domestic sugar producers receive its benefits. 
C)  its economic benefits totally offset its economic costs. 
D)  both consumers and producers are rationally ignorant.

Question 6

Why is rational ignorance important from an economic standpoint? I.Voters might not make informed choices.
II.Voters will make decisions based on incorrect or incomplete information.
III.Special interest groups may control economic outcomes if they are the only ones who are not rationally ignorant.

Accepted Answer

A)  I only 
B)  I and II only 
C)  II and III only 
D)  I,II,and III 
A)  I only 
B)  I and II only 
C)  II and III only 
D)  I,II,and III

Question 7

Public choice is a field of study that:

Accepted Answer

A)  looks at the consumption choices made by people who are near retirement. 
B)  uses economic tools to examine political behavior. 
C)  uses mathematics and statistics to infer relationships between two or more variables of public interest. 
D)  analyzes trends in population growth and other structural changes in the population. 
A)  looks at the consumption choices made by people who are near retirement. 
B)  uses economic tools to examine political behavior. 
C)  uses mathematics and statistics to infer relationships between two or more variables of public interest. 
D)  analyzes trends in population growth and other structural changes in the population.

Question 8

Government ownership of the press and of radio:

Accepted Answer

A)  increases quality of government. 
B)  decreases quality of government. 
C)  increases the degree of economic freedom. 
D)  decreases social corruption. 
A)  increases quality of government. 
B)  decreases quality of government. 
C)  increases the degree of economic freedom. 
D)  decreases social corruption.

Question 9

When citizens have NOT satisfied their basic needs for food,shelter and security,they still demand more cerebral goods.

Accepted Answer

A) True 
 B)False

Question 10

Political business cycles are due primarily to ______ voters.

Accepted Answer

A)  rationally informed 
B)  rationally ignorant 
C)  myopic 
D)  forward-looking 
A)  rationally informed 
B)  rationally ignorant 
C)  myopic 
D)  forward-looking

Question 11

It is always rational to be ignorant.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following public policies does NOT fit the diffused costs and concentrated benefits story?

Accepted Answer

A)  agricultural subsidies 
B)  minimum wage 
C)  price supports 
D)  trade quota and tariffs 
A)  agricultural subsidies 
B)  minimum wage 
C)  price supports 
D)  trade quota and tariffs

Question 13

Rational ignorance occurs when people are not knowledgeable of something because:

Accepted Answer

A)  those people have no incentives to learn anything. 
B)  the benefits of being informed are less than the cost of becoming informed. 
C)  they are simply irrational. 
D)  they are self-centered and lack the ability to learn. 
A)  those people have no incentives to learn anything. 
B)  the benefits of being informed are less than the cost of becoming informed. 
C)  they are simply irrational. 
D)  they are self-centered and lack the ability to learn.

Question 14

Which of the following best explains the term rational ignorance?

Accepted Answer

A)  It is the decision to search for and acquire information only if there is enough time. 
B)  It is the decision to stay uninformed on certain topics because of the prohibitive cost of gathering information. 
C)  It is the decision to ignore free information that is vital in making the correct decision. 
D)  It is the rational weighing of costs versus benefits. 
A)  It is the decision to search for and acquire information only if there is enough time. 
B)  It is the decision to stay uninformed on certain topics because of the prohibitive cost of gathering information. 
C)  It is the decision to ignore free information that is vital in making the correct decision. 
D)  It is the rational weighing of costs versus benefits.

Question 15

Sugar quotas:

Accepted Answer

A)  are not an issue in the United States despite rationally ignorant voters. 
B)  harm United States sugar farmers at the benefit of the candy and soda industry. 
C)  cost the typical family about $6 per year but provide millions of dollars of benefits to Florida sugar producers. 
D)  lead to lower prices and increased output,and thus are opposed by the sugar industry. 
A)  are not an issue in the United States despite rationally ignorant voters. 
B)  harm United States sugar farmers at the benefit of the candy and soda industry. 
C)  cost the typical family about $6 per year but provide millions of dollars of benefits to Florida sugar producers. 
D)  lead to lower prices and increased output,and thus are opposed by the sugar industry.

Question 16

In which of the following decisions is a person likely to be rationally ignorant?

Accepted Answer

A)  deciding which car to buy 
B)  deciding where to live 
C)  deciding which mayoral candidate to vote for 
D)  deciding which television show to watch 
A)  deciding which car to buy 
B)  deciding where to live 
C)  deciding which mayoral candidate to vote for 
D)  deciding which television show to watch

Question 17

Public choice is the study of:

Accepted Answer

A)  how choices are made without economic theory. 
B)  how the general public is affected by government policies. 
C)  irrational behavior of individuals. 
D)  political behavior in the context of economics. 
A)  how choices are made without economic theory. 
B)  how the general public is affected by government policies. 
C)  irrational behavior of individuals. 
D)  political behavior in the context of economics.

Question 18

Many people are concerned about voter apathy.Use economics to explain why there is a lack of interest in voting and politics.

Accepted Answer

Voters have an incentive to be ignorant.

Question 19

According to public choice theory,a more democratic country:

Accepted Answer

A)  can eliminate rational ignorance so that politicians can focus on policies that promote economic growth. 
B)  have a higher living standard without policies to promote economic growth. 
C)  will have more policies that promote economic growth because it has a larger share of population that is brought into power. 
D)  will have more policies that promote economic growth because a small elite is more efficient in making policy decisions. 
A)  can eliminate rational ignorance so that politicians can focus on policies that promote economic growth. 
B)  have a higher living standard without policies to promote economic growth. 
C)  will have more policies that promote economic growth because it has a larger share of population that is brought into power. 
D)  will have more policies that promote economic growth because a small elite is more efficient in making policy decisions.

Question 20

The association between democracy and wealth occurs because democracy creates a demand for wealth.

Accepted Answer

A) True 
 B)False

Which of the following government programs is the largest in terms of spending?

The free flow of ideas helps both the market and government to function better.

Evidence suggests that voters are myopic,meaning they are responsive to economic conditions:

The main reason that government legislation on sugar quotas passes is that:

Why is rational ignorance important from an economic standpoint? I.Voters might not make informed choices. II.Voters will make decisions based on incorrect or incomplete information. III.Special interest groups may control economic outcomes if they are the only ones who are not rationally ignorant.

Public choice is a field of study that:

Government ownership of the press and of radio:

When citizens have NOT satisfied their basic needs for food,shelter and security,they still demand more cerebral goods.

Political business cycles are due primarily to ______ voters.

It is always rational to be ignorant.

Which of the following public policies does NOT fit the diffused costs and concentrated benefits story?

Rational ignorance occurs when people are not knowledgeable of something because:

Which of the following best explains the term rational ignorance?

Sugar quotas:

In which of the following decisions is a person likely to be rationally ignorant?

Public choice is the study of:

Many people are concerned about voter apathy.Use economics to explain why there is a lack of interest in voting and politics.

According to public choice theory,a more democratic country:

The association between democracy and wealth occurs because democracy creates a demand for wealth.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Filters

Exam 21: Political Economy and Public Choice

Which of the following government programs is the largest in terms of spending?

The free flow of ideas helps both the market and government to function better.

Evidence suggests that voters are myopic,meaning they are responsive to economic conditions:

The main reason that government legislation on sugar quotas passes is that:

Why is rational ignorance important from an economic standpoint? I.Voters might not make informed choices. II.Voters will make decisions based on incorrect or incomplete information. III.Special interest groups may control economic outcomes if they are the only ones who are not rationally ignorant.

Public choice is a field of study that:

Government ownership of the press and of radio:

When citizens have NOT satisfied their basic needs for food,shelter and security,they still demand more cerebral goods.

Political business cycles are due primarily to ______ voters.

It is always rational to be ignorant.

Which of the following public policies does NOT fit the diffused costs and concentrated benefits story?

Rational ignorance occurs when people are not knowledgeable of something because:

Which of the following best explains the term rational ignorance?

Sugar quotas:

In which of the following decisions is a person likely to be rationally ignorant?

Public choice is the study of:

Many people are concerned about voter apathy.Use economics to explain why there is a lack of interest in voting and politics.

According to public choice theory,a more democratic country:

The association between democracy and wealth occurs because democracy creates a demand for wealth.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Filters