Exam 5: Governments Role and Government Failure

Refer to the above table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a jail and a stadium:

Unfunded liabilities occur when the government considers long-term benefits and costs of projects, and approves only those with positive long-term net benefits.

Government laws and policies need to be uniformly enforced. But this leads to all of the following problems, except:

Critics of government contend that the market system creates incentives and pressures for internal efficiency which are absent in the public sector.

Majority voting may produce economically inefficient outcomes because it:

Fiscal policy refers to the government's attempt at regulating the economy through the use of changes in:

Some economists contend that government agencies are generally less efficient than private businesses due to the following reasons, except:

Many governments end up with chronic budget deficits because:

If a public good provides social benefits that are greater than its costs, then majority of voters would always vote in favor of producing the good.

The provision of loan guarantees can improve economic efficiency when:

Interest groups result when people:

It is generally believed that, because of the election process, the incentives and pressures for internal efficiency are stronger in the public sector than in the private sector.

Rent-seeking behavior in public choice theory refers to:

If choice A wins over choice B in a majority vote, while choice B wins over choice C in a majority vote, then we can conclude that choice A would win over choice C.

Government's ability to reduce private-sector economic risks through laws and regulations would encourage all of the following, except:

The so-called collective action problem is the reason why:

Refer to the graph above. Suppose that its shows the S and D graphs in a market where production entails a significant amount of pollution. In this case, the government should use its coercive power to make:

Refer to the above table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a park and a jail:

In the median-voter model, the median voter refers to the voter who makes her choice at the midpoint of the voting period.

Loan guarantees provided by government will reduce the willingness of investors to take on the risk in a project.