Question 1

Given economic research on previous subsidies, should states and local governments subsidize corporate relocations?

Accepted Answer

A)  Yes, there is a 100% return on the taxpayer money spent.
B)  No, there is 0 percent return on taxpayer's money.
C)  Yes, it's always a good idea to attract new businesses to your state no matter how much it costs.
D)  No, there are low economic returns on these types of offers.E) A) and B)
F) C) and D)

Question 2

Describe the two characteristics of public goods.

Accepted Answer

The two characteristics of public goods ...

Question 3

Which of the following is considered a potential solution to some regulatory capture?

Accepted Answer

A)  bringing industry experts into the regulatory process
B)  creating a standard set of regulations for all industries
C)  deregulation of the industry
D)  government subsidies for firms in the industryE) All of the above
F) None of the above

Question 4

Which of the following statements concerning a public good is false?

Accepted Answer

A)  It is impossible to exclude nontaxpayers from the enjoyment of the public good.
B)  All benefits associated with the production and use of a public good are received by the government.
C)  The availability of a public good to one person simultaneously makes it available to all members of society.
D)  The private sector does not have an economic incentive to produce a socially optimal amount of a public good.E) B) and C)
F) A) and D)

Question 5

Refer to the table. In a choice between parks and education,

Accepted Answer

A)  no voter decision is possible.
B)  a majority of voters would favor education.
C)  the outcome would depend on which item was listed first on the ballot.
D)  a majority of voters would favor parks.E) B) and C)
F) None of the above

Question 6

The study of public choice theory involves the economic analysis of the following, except

Accepted Answer

A)  government decision making.
B)  actions by elected officials.
C)  the impact of budget deficits on the public debt.
D)  voting and elections.E) A) and D)
F) A) and C)

Question 7

The special-interest effect is one that yields

Accepted Answer

A)  private benefits equal to external benefits.
B)  large external benefits compared to private benefits.
C)  small economic losses to a small number of people and large economic losses to a large number of people.
D)  large economic gains to a small number of people and small economic losses to a large number of people.E) B) and D)
F) B) and C)

Question 8

In which of the following cases has political corruption definitely occurred?

Accepted Answer

A)  Political candidates accept campaign contributions from people.
B)  Government agencies impose fines for such things as traffic violations.
C)  A bureaucrat allows someone to look at confidential documents for an informal fee.
D)  A government agency receives donations for distribution to charity.E) A) and B)
F) All of the above

Question 9

The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state. From this we can definitively conclude

Accepted Answer

A)  that political corruption has occurred.
B)  that logrolling has occurred.
C)  that a principal-agent problem has occurred.
D)  nothing; the Road Runner Club may have donated to Senator Sly because he already supported the jogging paths.E) B) and D)
F) B) and C)

Question 10

Which of the following is an example of a public good?

Accepted Answer

A)  a weather warning system
B)  a television
C)  a sofa
D)  a bottle of sodaE) A) and B)
F) A) and C)

Question 11

Does majority voting lead to efficient outcomes?

Accepted Answer

No, majority voting can produce voting o...

Question 12

Even if individual voters have clear preferences, and they stay consistent in their preferences, we could still end up with the paradox of voting.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Answer the question based on the following information for a public good. Pₐ and Pᵦ are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society.  The collective willingness of this society to pay for the second unit of this public good is

Accepted Answer

A)  $2.
B)  $4.
C)  $6.
D)  $8.E) C) and D)
F) All of the above

Question 15

A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to

Accepted Answer

A)  logrolling.
B)  the paradox of voting.
C)  the median-voter model.
D)  the special-interest effect.E) A) and D)
F) C) and D)

Question 16

An economic analysis of the relationship between proposed legislation affecting major employers in each state and the voting patterns of senators and representatives in Congress on that legislation would fit within the subcategory of economics called

Accepted Answer

A)  the economics of fiscal policy.
B)  public choice theory.
C)  behavioral economics.
D)  monetarism.E) All of the above
F) B) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Suppose a college economics department decides to use a single economics text for all sections of principles of economics. Also assume that the three individual members of the textbook selection committee have the following preferences.  Assuming all other textbook qualities except analytical level are the same, majority voting will result in the committee

Accepted Answer

A)  being deadlocked and unable to decide on a book.
B)  selecting the C/F book.
C)  selecting the M/B book.
D)  selecting the O/S book.E) None of the above
F) A) and B)

Question 19

Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $600, a majority vote will

Accepted Answer

A)  pass this project and resources will be overallocated to it.
B)  defeat this project and resources will be underallocated to it.
C)  pass this project and resources will be efficiently allocated to it.
D)  defeat this project and no resources will be allocated to it.E) A) and C)
F) B) and C)

Question 20

Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $12, respectively, for the fifth unit of a public good. Also, assume that the marginal cost of the fifth unit is $23. We can conclude that

Accepted Answer

A)  the fifth unit should be produced.
B)  the fifth unit should not be produced.
C)  zero units should be produced.
D)  3 units should be produced.E) A) and D)
F) C) and D)

Exam 5: Public Goods, Public Choice, and Government Failure

Which of the following statements concerning a public good is false?

Correct Answer
verified

Even if individual voters have clear preferences, and they stay consistent in their preferences, we could still end up with the paradox of voting.

Correct Answer
verified

In which of the following cases has political corruption definitely occurred?

Correct Answer
verified

Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $12, respectively, for the fifth unit of a public good. Also, assume that the marginal cost of the fifth unit is $23. We can conclude that

Correct Answer
verified

Which of the following is an example of a public good?

Correct Answer
verified

Given economic research on previous subsidies, should states and local governments subsidize corporate relocations?

Correct Answer
verified

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

Correct Answer
verified

Does majority voting lead to efficient outcomes?

Correct Answer
verified
No, majority voting can produce voting o...
View Answer

Correct Answer
verified

The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state. From this we can definitively conclude

Correct Answer
verified

Describe the two characteristics of public goods.

Correct Answer
verified
The two characteristics of public goods ...
View Answer

Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $600, a majority vote will

Correct Answer
verified

A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to

Correct Answer
verified

Correct Answer
verified

Refer to the table. In a choice between parks and education,

Correct Answer
verified

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

Correct Answer
verified

The special-interest effect is one that yields

Correct Answer
verified

The study of public choice theory involves the economic analysis of the following, except

Correct Answer
verified

Which of the following is considered a potential solution to some regulatory capture?

Correct Answer
verified

An economic analysis of the relationship between proposed legislation affecting major employers in each state and the voting patterns of senators and representatives in Congress on that legislation would fit within the subcategory of economics called

Correct Answer
verified

Exam 5: Public Goods, Public Choice, and Government Failure

Which of the following statements concerning a public good is false?

Correct AnswerverifiedShow Answer

Even if individual voters have clear preferences, and they stay consistent in their preferences, we could still end up with the paradox of voting.

Correct AnswerverifiedShow Answer

In which of the following cases has political corruption definitely occurred?

Correct AnswerverifiedShow Answer

Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $12, respectively, for the fifth unit of a public good. Also, assume that the marginal cost of the fifth unit is $23. We can conclude that

Correct AnswerverifiedShow Answer

Which of the following is an example of a public good?

Correct AnswerverifiedShow Answer

Given economic research on previous subsidies, should states and local governments subsidize corporate relocations?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Does majority voting lead to efficient outcomes?

Correct AnswerverifiedNo, majority voting can produce voting o...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state. From this we can definitively conclude

Correct AnswerverifiedShow Answer

Describe the two characteristics of public goods.

Correct AnswerverifiedThe two characteristics of public goods ...View AnswerShow Answer

Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $600, a majority vote will

Correct AnswerverifiedShow Answer

A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the table. In a choice between parks and education,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The special-interest effect is one that yields

Correct AnswerverifiedShow Answer

The study of public choice theory involves the economic analysis of the following, except

Correct AnswerverifiedShow Answer

Which of the following is considered a potential solution to some regulatory capture?

Correct AnswerverifiedShow Answer

An economic analysis of the relationship between proposed legislation affecting major employers in each state and the voting patterns of senators and representatives in Congress on that legislation would fit within the subcategory of economics called

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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No, majority voting can produce voting o...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The two characteristics of public goods ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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