Exam 5: Governments Role and Government Failure

Assume that Abby, Ben, and Clara are the only citizens in a community. A proposed public good has a total cost of $1000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $400 each to Abby, Ben, and Clara. In a majority vote, this proposal will most likely be:

Many state and local governments in the U.S. have balanced-budget laws in order to prevent politicians from:

The situation where "the few who yell the loudest gets heard" is referred to as the:

The U.S. is among the countries that have very low levels of political corruption, as reported in the Global Corruption Barometer of 2010-11.

It is observed that the person representing the middle position on an issue will most likely determine the outcome of an election. This view is most closely associated with the:

To make up for a shortfall in its annual budget, the government must:

Voters are making a choice to spend money on three projects: a dam, a school, or a road. In the choice between the dam and the school, the majority favors the school. In a choice between a dam and a road, the majority favors a dam. In a choice between a road and a school, the majority favors a road. These rankings indicate that majority voting may:

Politicians who have to go through elections tend to focus on the short-term net benefits of projects because of:

The "principal-agent problem" often arises in public choice when politicians pursue the best interests of their constituents.

The difficulties in managing government in a market economy include the following, except:

"Good economics" is about marginal costs and marginal benefits of specific projects; "good politics" is more about clear benefits and hidden costs.

Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed public good has a total cost of $1000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $500 for Matt, $280 for Joe, and $260 for Teresa. In a majority vote, this proposal will most likely be:

Even in a democratic government, elected officials may end up pursuing policies that go against the preferences of the people due to the following reasons, except:

In the U.S. market economy, the government performs the following prominent roles, except:

One key is difference between government activities and private transactions is that:

One implication of the median-voter model is that at any point in time, most voters will:

The collective action problem makes it hard for voters to counter the influence of special-interest groups.

Monetary and fiscal policies are tools that the government can use to try to stabilize the economy.

As voters "vote with their feet" and move to political districts where the median-voter's preference is closer to their own, the median-voter's preference will:

The sometimes inconsistent results coming from a series of paired-choice voting is due to: