Question 1

The term logrolling describes

Accepted Answer

A)  government spending programs financed with user charges. 
B)  the exchange between legislators of their votes on issues. 
C)  the actions of legislators who are willing to trade their political votes for campaign contributions from special interest groups. 
D)  government spending programs that primarily benefit loggers and other forest workers.

Question 2

Dairy farmers hold an annual Capitol Hill ice cream social that provides free ice cream for congressional staffers during which time representatives from the industry discuss issues with, and provide information to, congressional staff. This is an example of

Accepted Answer

A)  logrolling. 
B)  rent seeking. 
C)  pork-barrel legislation. 
D)  the shortsightedness effect.

Question 3

The term pork-barrel legislation refers to

Accepted Answer

A)  government spending programs financed with user charges. 
B)  the exchange between legislators of their votes on issues. 
C)  legislation that bundles together a number of projects, each benefiting local interests at the expense of general taxpayers. 
D)  the actions of legislators who are willing to trade their political votes for campaign contributions from special interest groups.

Question 4

Young John recently took a job with the U.S. Department of Agriculture. His supervisor gave him an assignment and a two-week deadline. He finished the job in three days and turned it in. Now his coworkers are mad at John. Why?

Accepted Answer

The answer of Young John recently took a job with...

Question 5

Public choice analysis

Accepted Answer

A)  assumes individuals in the public sector act in their own self-interests. 
B)  assumes individuals seek to serve the public interest rather than their own personal interests. 
C)  is the study of decision making in the formation and operation of private organizations. 
D)  assumes the government is a corrective device that takes the necessary action to offset economic inefficiency arising from market failure.

Question 6

Public choice analysis indicates

Accepted Answer

A)  most income transfers will be directed toward the poor. 
B)  rent-seeking activities will improve the efficiency of resource allocation and promote economic growth. 
C)  rent seeking will be less attractive if the nation's legal (or constitutional) structure makes it difficult to use the political process to take the property or income of others. 
D)  politicians will consistently oppose programs favored by rent seekers if those programs reduce the welfare of society.

Question 7

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

Accepted Answer

A)  Most of the benefits of pork-barrel projects within your district will accrue to your constituents, while most of the costs will be imposed on voters from other districts. 
B)  Most of the costs of pork-barrel projects within your district will be imposed on your constituents, while most of the benefits will accrue to voters from other districts. 
C)  Pork producers are a powerful political lobby that will influence the actions of legislators in all districts. 
D)  This is a trick question; in a representative democracy, there is little incentive for legislators to support pork-barrel projects.

Question 8

Public choice analysis indicates

Accepted Answer

A)  politicians under representative democracy are led as if by an invisible hand to adopt legislation that enhances the wealth of a nation. 
B)  political structures consistent with economic efficiency tend to emerge naturally from the ordinary political process. 
C)  constitutional rules establishing procedures and limiting the ability of the political process to engage in redistributive activities can improve the economic efficiency of government. 
D)  all of the above are correct.

Question 9

Economic theory indicates that the behavior of

Accepted Answer

A)  government employees differs from the behavior of employees in the private sector because government employees generally disregard their own personal self-interest when making decisions. 
B)  elected public officials differs from the behavior of all other individuals in society because they are not influenced by private interests. 
C)  individuals when they make decisions about who to vote for is very different from the behavior of these same individuals when they make other types of choices. 
D)  voters, government employees, and public officials is best understood by applying the same basic principle we use to predict the behavior of people in the private sector--that incentives matter.

Question 10

Public choice theory assumes voters, politicians, and other individuals in the public sector are largely motivated by

Accepted Answer

A)  a desire to promote the general welfare. 
B)  a desire to meet the conditions of economic efficiency for the economy as a whole. 
C)  altruism or the good of the public as a whole. 
D)  personal self-interest.

Question 11

When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,

Accepted Answer

A)  consumers have a strong incentive to search out those firms offering them the best deal. 
B)  private producers of such goods will have little incentive to control costs and provide them at low prices. 
C)  goods and services will only be supplied if consumers are willing to pay an amount sufficient to cover their production costs. 
D)  the invisible hand will direct consumers and producers toward an efficient level of output.

Question 12

Senator Blacklung represents a state that grows a significant amount of tobacco. Not only do many of his constituents work for businesses in this industry, but the tobacco firms also make generous contributions to his reelection campaign. According to public choice theory, which of the following bills would Senator Blacklung be most likely to support?

Accepted Answer

A)  a bill proposing an increase in the tax on cigarettes to fund urban renewal programs across the nation 
B)  a bill that would provide substantial subsidies for tobacco growers 
C)  a bill proposing increased funding for a national antismoking awareness campaign financed by an increase in the tax on cigarettes 
D)  a bill that would prohibit senators from accepting campaign contributions from firms who are involved in the production or sale of tobacco products

Question 13

Economic analysis suggests that bureaucrats and public-sector managers have a strong incentive to

Accepted Answer

A)  make sure that their budgets are as small as possible so more funds will be available for other government programs. 
B)  expand their budgets to sizes beyond what would be considered economically efficient. 
C)  ensure that their budgets are exactly the size that would be considered economically efficient. 
D)  economize on their spending and return unspent funds to the general treasury.

Question 14

Which of the following was true with regard to the Great Depression?

Accepted Answer

A)  The policies of the New Deal brought the Great Depression to an end well before World War II. 
B)  Sound economic policy was followed during this era, which makes the length and severity of the Great Depression puzzling to economists. 
C)  The length and severity of the Great Depression was the result of unsound economic policies followed by both the Hoover and Roosevelt Administrations. 
D)  The Great Depression was largely the result of the highly expansionary monetary policy of the Fed during the 1930s.

Question 15

According to the economic way of thinking, personal benefits and costs influence the actions of

Accepted Answer

A)  consumers in the private sector but not voters in the public sector. 
B)  producers in the private sector but not politicians in the public sector. 
C)  taxpayers but not recipients of government-provided goods and services. 
D)  consumers, producers, voters, and politicians in both the private and the public sectors.

Question 16

The Agricultural Adjustment Act, passed in 1933, was an effort to

Accepted Answer

A)  keep agricultural prices high by increasing supply. 
B)  keep agricultural prices low by increasing supply. 
C)  keep agricultural prices high by decreasing supply. 
D)  keep agricultural prices low by decreasing supply.

Question 17

Which of the following refers to when legislators trade votes on legislation?

Accepted Answer

A)  the shortsightedness effect 
B)  the special-interest effect 
C)  rational-ignorance effect 
D)  logrolling

Question 18

Which of the following is a category of activity that results in government failure?

Accepted Answer

A)  Externalities. 
B)  Special interest effect. 
C)  Public goods. 
D)  Monopoly.

Question 19

Most income transfer programs in the United States

Accepted Answer

A)  are means-tested programs that transfer income to the poor. 
B)  allocate income to small businesses and small farmers. 
C)  are designed to help those with very little economic and political power. 
D)  allocate income to concentrated interest groups, such as the elderly, large farmers, and business interests.

Question 20

Which of the following is true about the Great Depression?

Accepted Answer

A)  The Great Depression re-enforces the view that raising taxes in the midst of a severe recession is a bad idea. 
B)  The Great Depression clearly indicates that a prolonged period of monetary contraction will keep inflation low and promote monetary stability. 
C)  The Great Depression illustrates that trade restrictions will protect domestic industry and save jobs. 
D)  The Great Depression demonstrates that the political incentive structure during a severe downturn will encourage politicians to avoid frequent policy changes.

Exam 6: The Economics of Political Action

The term logrolling describes

Dairy farmers hold an annual Capitol Hill ice cream social that provides free ice cream for congressional staffers during which time representatives from the industry discuss issues with, and provide information to, congressional staff. This is an example of

The term pork-barrel legislation refers to

Young John recently took a job with the U.S. Department of Agriculture. His supervisor gave him an assignment and a two-week deadline. He finished the job in three days and turned it in. Now his coworkers are mad at John. Why?

Public choice analysis

Public choice analysis indicates

Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?

Public choice analysis indicates

Economic theory indicates that the behavior of

Public choice theory assumes voters, politicians, and other individuals in the public sector are largely motivated by

When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,

Economic analysis suggests that bureaucrats and public-sector managers have a strong incentive to

Which of the following was true with regard to the Great Depression?

According to the economic way of thinking, personal benefits and costs influence the actions of

The Agricultural Adjustment Act, passed in 1933, was an effort to

Which of the following refers to when legislators trade votes on legislation?

Which of the following is a category of activity that results in government failure?

Most income transfer programs in the United States

Which of the following is true about the Great Depression?