Question 1

According to the shortsightedness effect, politicians tend to favor projects with

Accepted Answer

A)   short-run benefits and short-run costs.
B)   short-run benefits and long-run costs.
C)   long-run benefits and short-run costs.
D)   long-run benefits and long-run costs.E) B) and C)
F) C) and D) B

Question 2

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Accepted Answer

A)   shortsightedness effect.
B)   public-interest effect.
C)   free rider problem.
D)   rational-ignorance effect.E) A) and C)
F) C) and D) D

Question 3

Which of the following is true?

Accepted Answer

A)   The incentives to engage in rent-seeking activities increase with the ease with which the political process can provide personal gain at the expense of others.
B)   The amount of resources devoted toward rent seeking generally has no impact on the economic prosperity of a nation.
C)   Income transfers directed toward the poor constitute about half of all income transfers in the United States.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 4

Special-interest programs are highly attractive to vote-seeking politicians because

Accepted Answer

A)   these programs are highly efficient, and therefore, they tend to enhance the general welfare of the populace.
B)   members of special interest groups favoring these programs are less likely to vote than the taxpayers who pay for them.
C)   low-income recipients are the primary beneficiaries of special-interest programs.
D)   members of special interest groups favoring these programs feel strongly about them while most other voters are rationally uninformed about them.E) A) and D)
F) A) and B)

Question 5

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.E) B) and C)
F) A) and B)

Question 6

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.E) None of the above
F) B) and C) D

Question 7

The shortsightedness effect suggests that

Accepted Answer

A)   politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future.
B)   politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period.
C)   voters will tend to weigh future costs and benefits more heavily than current costs and benefits.
D)   legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.E) A) and B)
F) All of the above

Question 8

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.E) B) and C)
F) A) and D)

Question 9

Scenario 6-1
The quotation below relates to the following question(s) .
"The ideal policy, from the viewpoint of the state, is one with identifiable beneficiaries, each of whom is helped appreciably, at the cost of many unidentifiable persons, none of whom is hurt very much." (George Stigler, A Dialogue on the Proper Economic Role of the State) 
-Refer to Scenario 6-1. This statement is probably

Accepted Answer

A)   incorrect because voters are well informed on a wide range of political issues.
B)   incorrect because the political process dilutes the influence of special interest groups, because like other citizens, their members have only one vote.
C)   correct because the well-informed voter will favor policies that cater to the views of small groups of people.
D)   correct because voters who have a strong personal interest in an issue will tend to support candidates who cater to their views, whereas most other voters ignore the issue.E) A) and B)
F) A) and C)

Question 10

A local government operates a city recreation center with a pool and tennis courts. The center is financed through $50 annual membership fees (required for members to use it) . This type of financing is an example of a

Accepted Answer

A)   head tax.
B)   excise fee.
C)   user charge.
D)   progressive tax.E) C) and D)
F) B) and C)

Question 11

Giving local governments more power is less dangerous than giving the same power to the national government because

Accepted Answer

A)   local governments generally have more strict constitutional rules they must operate under.
B)   it is easier to vote in local elections than national elections.
C)   only national-level governments are allowed to use coercive force.
D)   higher exit options exist at the local level--it is easier for people to move away from a bad local government.E) A) and B)
F) A) and C)

Question 12

Which of the following is true?

Accepted Answer

A)   Competitive behavior is present in the market sector but not in the public sector.
B)   Because candidates for public office represent a bundle of views, there is more ability for individuals to make their preferences count on specific issues than in the market sector.
C)   When decisions are made democratically, the economic and political power of all individuals will be equal unlike in the market sector.
D)   The reality of the aggregate consumption-aggregate payment link imposed by scarcity is present in both the market and public sectors.E) None of the above
F) A) and B)

Question 13

Despite many differences, the market and public sectors are similar in which one of the following respects?

Accepted Answer

A)   In both sectors, income (or power)  is distributed on the basis of the same criterion.
B)   Consumers in the market sector and voters in the public sector are equally well informed.
C)   Voluntary exchange, rather than compulsion, is characteristic of both sectors.
D)   It will be costly to use scarce goods, whether through the private or the public sector.E) A) and C)
F) None of the above

Question 14

Which of the following factors explains why managers of government agencies (the public sector)  have little incentive to operate efficiently?

Accepted Answer

A)   It is relatively easy for voters to detect operational inefficiency in the public sector and do something to correct it.
B)   Public-sector managers face fierce competition.
C)   Public-sector managers have no fear of losses and bankruptcy when operational efficiency is not achieved.
D)   All of the above explain why government agencies have little incentive to be efficient.E) None of the above
F) A) and D)

Question 15

Which of the following factors explains why managers of government agencies have little incentive to achieve operational efficiency?

Accepted Answer

A)   Public-sector managers have no fear of bankruptcy when operational efficiency is not achieved.
B)   Public-sector managers face fierce competition.
C)   It is relatively easy for voters to detect operational inefficiency in the public sector and do something to correct it.
D)   All of the above explain why government agencies have little incentive to be efficient.E) A) and D)
F) A) and C)

Question 16

Senator Spendall is able to use his position on an important committee to set aside government funding specifically for a new bridge in his hometown. This is an example of

Accepted Answer

A)   earmarking.
B)   logrolling.
C)   pork-barrel legislation.
D)   the invisible hand principle.E) C) and D)
F) A) and B)

Question 17

When the government both provides a service and covers its costs through taxation,

Accepted Answer

A)   the government has a strong incentive to supply consumers with desired goods at a low cost.
B)   consumers are in a weak position to either discipline the suppliers or alter the quantity or quality of the service provided.
C)   the invisible hand will direct decision makers toward the most efficient level of output.
D)   Consumers have strong incentive to be cost conscious.E) None of the above
F) All of the above

Question 18

Public choice analysis suggests that the primary motivating factor for politicians will be finding the policies that are most likely to

Accepted Answer

A)   get them reelected.
B)   improve economic efficiency.
C)   improve the welfare of society as a whole.
D)   anger the interest groups that provide substantial contributions to their campaigns.E) B) and D)
F) All of the above

Question 19

Joella is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Joella be most likely to vote for in the upcoming election?

Accepted Answer

A)   Politician A proposes increasing the property tax on personal automobiles and using the money to increase teacher salaries by 10 percent.
B)   Politician B proposes an across-the-board increase in state income tax rates and using the money to increase the benefits paid to unemployed workers.
C)   Politician C proposes increasing the property tax on personal automobiles and using the money to increase the benefits paid to unemployed workers.
D)   Politician D proposes an across-the-board increase in state income tax rates and using the money to improve the highway system.E) C) and D)
F) A) and B)

Question 20

Which of the following is true about the market and public sectors?

Accepted Answer

A)   Competitive behavior is present in both sectors.
B)   The public sector utilizes the price mechanism more than the private sector.
C)   In both sectors, individuals always pay for the goods and services they consume.
D)   There is more free choice for individual consumers in the public sector than in the private sector.E) A) and D)
F) All of the above

Exam 6: The Economics of Collective Decision-Making

According to the shortsightedness effect, politicians tend to favor projects with

Correct Answer
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B

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Correct Answer
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D

Which of the following is true?

Correct Answer
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Special-interest programs are highly attractive to vote-seeking politicians because

Correct Answer
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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

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

Correct Answer
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D

The shortsightedness effect suggests that

Correct Answer
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Most voters will likely be concerned with

Correct Answer
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Correct Answer
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A local government operates a city recreation center with a pool and tennis courts. The center is financed through $50 annual membership fees (required for members to use it) . This type of financing is an example of a

Correct Answer
verified

Giving local governments more power is less dangerous than giving the same power to the national government because

Correct Answer
verified

Which of the following is true?

Correct Answer
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Despite many differences, the market and public sectors are similar in which one of the following respects?

Correct Answer
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Which of the following factors explains why managers of government agencies (the public sector) have little incentive to operate efficiently?

Correct Answer
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Which of the following factors explains why managers of government agencies have little incentive to achieve operational efficiency?

Correct Answer
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Senator Spendall is able to use his position on an important committee to set aside government funding specifically for a new bridge in his hometown. This is an example of

Correct Answer
verified

When the government both provides a service and covers its costs through taxation,

Correct Answer
verified

Public choice analysis suggests that the primary motivating factor for politicians will be finding the policies that are most likely to

Correct Answer
verified

Joella is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Joella be most likely to vote for in the upcoming election?

Correct Answer
verified

Which of the following is true about the market and public sectors?

Correct Answer
verified

Exam 6: The Economics of Collective Decision-Making

According to the shortsightedness effect, politicians tend to favor projects with

Correct AnswerverifiedB

Economists refer to the lack of incentive that voters have to search for and obtain information to help make better political choices as the

Correct AnswerverifiedD

Which of the following is true?

Correct AnswerverifiedShow Answer

Special-interest programs are highly attractive to vote-seeking politicians because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

The shortsightedness effect suggests that

Correct AnswerverifiedShow Answer

Most voters will likely be concerned with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A local government operates a city recreation center with a pool and tennis courts. The center is financed through $50 annual membership fees (required for members to use it) . This type of financing is an example of a

Correct AnswerverifiedShow Answer

Giving local governments more power is less dangerous than giving the same power to the national government because

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

Despite many differences, the market and public sectors are similar in which one of the following respects?

Correct AnswerverifiedShow Answer

Which of the following factors explains why managers of government agencies (the public sector) have little incentive to operate efficiently?

Correct AnswerverifiedShow Answer

Which of the following factors explains why managers of government agencies have little incentive to achieve operational efficiency?

Correct AnswerverifiedShow Answer

Senator Spendall is able to use his position on an important committee to set aside government funding specifically for a new bridge in his hometown. This is an example of

Correct AnswerverifiedShow Answer

When the government both provides a service and covers its costs through taxation,

Correct AnswerverifiedShow Answer

Public choice analysis suggests that the primary motivating factor for politicians will be finding the policies that are most likely to

Correct AnswerverifiedShow Answer

Joella is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Joella be most likely to vote for in the upcoming election?

Correct AnswerverifiedShow Answer

Which of the following is true about the market and public sectors?

Correct AnswerverifiedShow Answer

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B

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D

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D

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