Exam 5: Governments Role and Government Failure

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:

Special interest groups result from people with strong preferences on a particular issue banding together to let policymakers know their preferences.

Which of the following countries had the least corruption, as reported in the Global Corruption Barometer for 2010-11?

Deregulation of an industry will always lead to an improvement in economic efficiency.

The special-interest effect is significant because:

Regulatory capture in government often happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry.

The ability to impose fines, revoke licenses, and put people into jail allows the government to:

One consequence of the paradox of voting is that whoever sets the agenda of a vote could practically predetermine the results of the vote.