Question 1

If new regulations make it illegal to sell older model electrical appliances, then

Accepted Answer

A)  producers of new models that meet the regulations will see demand for their output rise. 
B)  consumers who might have purchased to older appliances are clearly made better off. 
C)  consumers are helped, but the profits of appliance producers are not affected. 
D)  consumers will certainly gain from the change.

Question 2

Despite being a college graduate, Jack Adams cannot name any of his representatives in Congress and he has no idea which issues are being debated and voted on this week in Congress. According to public choice analysis, Jack is

Accepted Answer

A)  irrational. 
B)  considering only the welfare of society and not his own personal interests. 
C)  not intelligent enough to understand the issues. 
D)  making a rational personal choice because knowing these things gives him little personal benefit.

Question 3

The methodology of public choice analysis

Accepted Answer

A)  develops a logically consistent theory based on how individual actors (such as voters, politicians, and bureaucrats) respond to incentives. 
B)  assumes that all decisions made by individual actors in the public sector are done with the public interest in mind, rather than their private interests. 
C)  assumes that individuals generally react to the incentives they face when making choices in the private sector but not in the public sector. 
D)  focuses on the development of a single theory of government as a whole rather than on analyzing the choices made by individual agents in the public sector.

Question 4

Government decisions tend to be biased toward actions that have

Accepted Answer

A)  current costs and future benefits that are both easily observable. 
B)  future costs that are difficult to identify and current benefits that are easily observable. 
C)  future costs and future benefits that are both difficult to identify. 
D)  current costs that are easily observable and future benefits that are difficult to identify.

Question 5

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 6

Of all government spending in the United States, what amount occurs at the federal level?

Accepted Answer

A)  less than 10 percent 
B)  about half 
C)  about three-fifths 
D)  more than 90 percent

Question 7

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 8

Public choice analysis

Accepted Answer

A)  assumes individuals in the public sector seek to serve the public interest rather than their own personal interests. 
B)  is the study of the decision making of individual actors (such as voters, politicians, and bureaucrats) in the public sector. 
C)  suggests that individual voters have a greater incentive to become informed when making choices among political candidates than when making choices about the products they consume. 
D)  finds that the individuals managing government agencies generally have a much stronger incentive to be efficient than do individuals managing private businesses.

Question 9

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 10

If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from

Accepted Answer

A)  potato farmers who own land that wouldn't be irrigated by the project. 
B)  taxpayers who would pay for the project. 
C)  consumers of potatoes who might benefit from an expansion in supply and slightly lower potato prices. 
D)  potato farmers who own the land to be irrigated.

Question 11

Which of the following factors weakens the case for government provision of goods and services relative to private-sector provision?

Accepted Answer

A)  monopoly 
B)  externalities 
C)  public goods 
D)  the special-interest effect

Question 12

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 13

Most voters will likely be concerned with

Accepted Answer

A)  most issues since most issues have some impact, however slight, on each citizen. 
B)  only a few special issues (those that exert the most impact on the voters' personal welfare). 
C)  most issues since information on most issues can be obtained at a low cost. 
D)  the views of a particular political candidate on all issues.

Question 14

Direct income transfers account for approximately what percentage of total government spending?

Accepted Answer

A)  10 percent 
B)  30 percent 
C)  50 percent 
D)  60 percent

Question 15

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

Accepted Answer

A)  The people who benefit from a government program pay the costs of the program roughly in proportion to the benefits that each receives. 
B)  The benefits are highly concentrated, and the costs are widespread among voters. 
C)  The costs are highly concentrated, and the benefits are widespread among voters. 
D)  The benefits accrue primarily in the future, while the costs are more visible during the current period.

Question 16

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 17

Is calling a voter rationally ignorant the same as calling her irrational? Explain.

Accepted Answer

The answer of Is calling a voter rationally ignorant the...

Question 18

Despite being a college graduate, Jack Adams cannot name any of his representatives in Congress and he has no idea which issues are being debated and voted on this week in Congress. According to public choice analysis, Jack is

Accepted Answer

A)  irrational. 
B)  considering only the welfare of society and not his own personal interests. 
C)  not intelligent enough to understand the issues. 
D)  making a rational personal choice because knowing these things gives him little personal benefit.

Question 19

Public choice theory suggests politicians will be most likely to favor redistribution of income from

Accepted Answer

A)  the rich to the poor. 
B)  unorganized taxpayers to well-organized interest groups. 
C)  middle-income taxpayers to both the rich and the poor. 
D)  well-organized businesses and labor groups to consumers.

Question 20

Public choice theory suggests that politicians will be most likely to favor redistribution of income from

Accepted Answer

A)  the rich to the poor. 
B)  disorganized individuals to well-organized special interest groups. 
C)  middle-income taxpayers to both the rich and the poor. 
D)  well-organized business and labor groups to consumers.

Exam 6: The Economics of Political Action

If new regulations make it illegal to sell older model electrical appliances, then

Despite being a college graduate, Jack Adams cannot name any of his representatives in Congress and he has no idea which issues are being debated and voted on this week in Congress. According to public choice analysis, Jack is

The methodology of public choice analysis

Government decisions tend to be biased toward actions that have

Most income transfer programs in the United States

Of all government spending in the United States, what amount occurs at the federal level?

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

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?

If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from

Which of the following factors weakens the case for government provision of goods and services relative to private-sector provision?

The term pork-barrel legislation refers to

Most voters will likely be concerned with

Direct income transfers account for approximately what percentage of total government spending?

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

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

Is calling a voter rationally ignorant the same as calling her irrational? Explain.

Despite being a college graduate, Jack Adams cannot name any of his representatives in Congress and he has no idea which issues are being debated and voted on this week in Congress. According to public choice analysis, Jack is

Public choice theory suggests politicians will be most likely to favor redistribution of income from

Public choice theory suggests that politicians will be most likely to favor redistribution of income from