Exam 21: Political Economy and Public Choice

Do "good politics" and "good economics" always coincide? Explain why or why not.

Democracy typically brings about more efficient outcomes because:

The United States federal government ______ the amount of sugar entering the country.

The smaller a special interest group is in term of percentage of the overall population,the more political power it typically has.

Politicians have a strong incentive to support projects even when their costs outweigh their benefits if:

Use the following to answer questions Figure: Median Voter 2 -(Figure: Median Voter 2)If taxes are the only issue and the candidates' names are in gray,who votes for John Jackson?

The median voter theorem states that:

Policy A adversely affects 50 million people at a cost of $1 per person.But Policy A also benefits 1,000 people at $30,000 per person.Which of the following statements is TRUE?

Economists say that voters are rationally ignorant about politics because:

When government makes it possible to externalize the cost of a good:

Control of the media do not enable special interest groups to control the government for their own ends.

According to the text,the 1974 famine in Bangladesh was largely a result of

The diffusion of costs and concentration of benefits: I.leads to rational ignorance on the part of voters. II.is the formula to which the sugar quota owes its existence. III.is a formula for reelection to political office.

The incumbent president is more likely to win reelection if:

Special interest groups have a large incentive to be ________ about legislation that benefits them directly,whereas voters tend to be ________ regarding these issues.

Figure: Median Voter 3 Suppose this figure represents defense spending preferences for seven voters and two candidates.Which candidate is more likely to win the election and why? If the losing candidate knows these preferences BEFORE the election,will that candidate be likely to change his or her public stance on defense spending? How?

Public choice theory implies that democracy is a perfect system to serve the social interest.

If a special interest group represents 10% of society,and there is a proposed public policy that will cost society $1 million and benefit that special interest group $1 million,which of the following is the most likely outcome according to public choice theory?

Voter myopia is the notion that voters are largely swayed by current economic conditions when casting their vote.

Much of public choice argues that what the public wants isn't reflected in elected officials' actions.Yet there is a strong connection between famine prevention and democracy (more democracy means less famine),and this "exception" is completely consistent with ideas from public choice.Why?