Exam 21: Political Economy and Public Choice

As part of the American Recovery and Reinvestment Act,$7 million was earmarked to build a bridge over a railroad crossing so that 168 Nebraska town residents wouldn't have to wait for the trains to pass.Which of the following best explains why this proposal was passed?

Explain the formula for political success.Provide an example.

The costs of many government projects (such as bridges,roads,and museums)create:

How are rational ignorance,special interest groups,and economic inefficiency related?

Rational public ignorance tends to be voluntary in democracies but public ignorance tends to be more involuntary in nondemocracies.

The median voter theorem implies that politicians:

When benefits are concentrated and costs are diffused,resources often get wasted on projects with high benefits and low costs.

Which of the following is TRUE about the relationship between democracy and economic growth?

What is a reason why markets should be free and unregulated?

Which of the following explains why the sugar quota is a winning policy for politicians?

As a predictive theory of politics the median voter theorem is applicable to almost all circumstances in politics.

Use the following to answer questions Figure: Economic Freedom and Living Standards -(Figure: Economic Freedom and Living Standards)Refer to the figure.Based on the data in this chart,the country with the lowest level of economic freedom is:

________ groups tend to favor more efficient policies.

There is a strong correlation between economic freedom and:

When more of the population has power,it's more likely that policies will offer something for virtually everybody.

Voters are myopic so they most likely focus on the economic conditions over a president's entire term.

Rational ignorance still leads to an efficient outcome,since the decision itself is rational.

With respect to the sugar quota,the people who are harmed are _____ and the people who benefit are _____.

Larger groups tend to favor more inefficient policies.

Economists tend to favor policies like price controls and tariffs.