Question 1

The median-voter model implies that

Accepted Answer

A)  political voting will be as economically efficient as "dollar voting" in competitive markets.
B)  all voters have about the same preferences for various public goods and services.
C)  many people will be dissatisfied with the size of government in the economy.
D)  with majority voting, there can never be a consistent ordering of public good preferences.E) A) and D)
F) A) and C)

Question 2

The idea of government failure includes all of the following except

Accepted Answer

A)  the special-interest effect.
B)  bureaucratic inefficiency.
C)  pressure by special-interest groups.
D)  extensive positive externalities from public and quasi-public goods.E) A) and B)
F) A) and C)

Question 3

Because of the free-rider problem,

Accepted Answer

A)  the market demand for a public good is overstated.
B)  the market demand for a public good is nonexistent or understated.
C)  government has increasingly yielded to the private sector in producing public goods.
D)  public goods often create serious negative externalities.E) B) and C)
F) A) and B)

Question 4

Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $1,000. All five citizens will share an equal portion of this cost in taxes. The benefit of the public good is $220 to Abby, $210 to Ben, $210 to Clara, $180 to Joe, and $120 to Matt. Who will likely vote in favor of this proposal?

Accepted Answer

A)  Abby, Ben, Clara, and Joe
B)  Ben, Clara, Joe, and Matt
C)  Ben, Clara, and Joe
D)  Abby, Ben, and ClaraE) A) and B)
F) All of the above

Question 5

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)  $6.
B)  $2.
C)  $4.
D)  $8.
E)  $1.F) B) and D)
G) A) and B)

Question 6

Answer the question on the basis of this table showing the marginal benefit a particular public project will provide to each of the three members of a community. No vote trading is allowed. If the tax cost of this proposed project is $600 per person, a majority vote will

Accepted Answer

A)  defeat this project and resources will be underallocated to it.
B)  pass this project and resources will be allocated efficiently.
C)  pass this project and resources will be overallocated to it.
D)  pass this project and resources will be underallocated to it.E) All of the above
F) C) and D)

Question 7

Refer to the table. The outcomes of the three possible sets of paired-choice majority votes illustrate the

Accepted Answer

A)  paradox of voting.
B)  inefficiency of logrolling.
C)  principal-agent problem.
D)  benefits of majority rule.E) All of the above
F) C) and D)

Question 8

"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is

Accepted Answer

A)  strongly influenced by the firms in the very industry that it is regulating.
B)  headed by bureaucrats who have a "lock" on their positions, without any rivals.
C)  completely dominating and controlling the actions of firms in the industry.
D)  headed by unelected government officials who have no strong desire to regulate.E) A) and D)
F) A) and C)

Question 9

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.  If the marginal cost of producing this good at the optimal quantity is $4, the optimal quantity must be

Accepted Answer

A)  1 unit.
B)  2 units.
C)  3 units.
D)  4 units.E) All of the above
F) B) and C)

Question 10

The special-interest effect in government decision making is significant because

Accepted Answer

A)  it corrects instances of spillover costs and benefits.
B)  it can lead to programs with concentrated benefits and diffuse costs.
C)  capitalistic economies are based upon the pursuit of self-interest.
D)  it allows us to avoid the collective-action problem.E) B) and C)
F) A) and D)

Question 11

New Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime control. This table shows the expected total annual costs and benefits of these alternatives.  The marginal benefit of crime control for Level Two is

Accepted Answer

A)  $ 90,000.
B)  $40,000.
C)  $ 60,000.
D)  $200,000.E) All of the above
F) C) and D)

Question 12

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.  Suppose government has already produced 4 units of this public good. The amount individual B is willing voluntarily to pay for the fourth unit is

Accepted Answer

A)  $14.
B)  $5.
C)  $2.
D)  $0.E) None of the above
F) A) and B)

Question 13

Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will result in a decision to order

Accepted Answer

A)  a medium pizza.
B)  a large pizza.
C)  a super-large pizza.
D)  two medium pizzas.E) B) and C)
F) A) and C)

Question 14

Which of the following would best explain why regulatory capture is a problem?

Accepted Answer

A)  The regulations implemented tend to reduce the profitability of the regulated industry and reduce global competitiveness.
B)  Regulatory capture unduly increases the size and power of government, increasing costs for taxpayers.
C)  Individuals implementing the regulations lack expertise about the industry and therefore make poor regulatory choices.
D)  The regulations implemented serve the private interests of the regulated industry, rather than addressing social interests such as consumer safety and environmental protection.E) A) and B)
F) B) and D)

Question 15

For which one of the following goods would we need to sum individual demand curves vertically to obtain the total demand curve?

Accepted Answer

A)  frozen yogurt
B)  bubble gum
C)  microwave popcorn
D)  courts of lawE) C) and D)
F) B) and C)

Question 16

Because of the so-called "bundled choice" problem, voters often vote for candidates that they are not entirely happy with.

Accepted Answer

A) True 
 B)False

Question 17

The field of economics that analyzes government decision making, politics, and elections is called

Accepted Answer

A)  public finance.
B)  public choice theory.
C)  collective economics.
D)  political economy.E) A) and C)
F) A) and B)

Question 18

Logrolling can either increase or diminish economic efficiency.

Accepted Answer

A) True 
 B)False

Question 19

Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a stadium and a park,

Accepted Answer

A)  a majority of the voters would favor the park, 2-to-1.
B)  a majority of the voters would favor the stadium, 2-to-1.
C)  a majority of the voters would favor the park, 3-to-0.
D)  a majority of the voters would favor the stadium, 3-to-0.E) All of the above
F) B) and C)

Question 20

The median-voter model indicates that political parties will

Accepted Answer

A)  target only those voters who can be influenced by rent seeking.
B)  direct their work to voters who can be influenced by special interests.
C)  campaign at one end of the distribution of voter sentiments.
D)  try to appeal to the sentiments of the voter holding the middle position.E) A) and C)
F) None of the above

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

The median-voter model implies that

Correct Answer
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Correct Answer
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Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will result in a decision to order

Correct Answer
verified

Correct Answer
verified

Correct Answer
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The median-voter model indicates that political parties will

Correct Answer
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The field of economics that analyzes government decision making, politics, and elections is called

Correct Answer
verified

Refer to the table. The outcomes of the three possible sets of paired-choice majority votes illustrate the

Correct Answer
verified

Correct Answer
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Answer the question on the basis of this table showing the marginal benefit a particular public project will provide to each of the three members of a community. No vote trading is allowed. If the tax cost of this proposed project is $600 per person, a majority vote will

Correct Answer
verified

Because of the so-called "bundled choice" problem, voters often vote for candidates that they are not entirely happy with.

Correct Answer
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Correct Answer
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Which of the following would best explain why regulatory capture is a problem?

Correct Answer
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Because of the free-rider problem,

Correct Answer
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For which one of the following goods would we need to sum individual demand curves vertically to obtain the total demand curve?

Correct Answer
verified

Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a stadium and a park,

Correct Answer
verified

The idea of government failure includes all of the following except

Correct Answer
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Logrolling can either increase or diminish economic efficiency.

Correct Answer
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The special-interest effect in government decision making is significant because

Correct Answer
verified

"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is

Correct Answer
verified

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

The median-voter model implies that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will result in a decision to order

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The median-voter model indicates that political parties will

Correct AnswerverifiedShow Answer

The field of economics that analyzes government decision making, politics, and elections is called

Correct AnswerverifiedShow Answer

Refer to the table. The outcomes of the three possible sets of paired-choice majority votes illustrate the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Answer the question on the basis of this table showing the marginal benefit a particular public project will provide to each of the three members of a community. No vote trading is allowed. If the tax cost of this proposed project is $600 per person, a majority vote will

Correct AnswerverifiedShow Answer

Because of the so-called "bundled choice" problem, voters often vote for candidates that they are not entirely happy with.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would best explain why regulatory capture is a problem?

Correct AnswerverifiedShow Answer

Because of the free-rider problem,

Correct AnswerverifiedShow Answer

For which one of the following goods would we need to sum individual demand curves vertically to obtain the total demand curve?

Correct AnswerverifiedShow Answer

Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a stadium and a park,

Correct AnswerverifiedShow Answer

The idea of government failure includes all of the following except

Correct AnswerverifiedShow Answer

Logrolling can either increase or diminish economic efficiency.

Correct AnswerverifiedShow Answer

The special-interest effect in government decision making is significant because

Correct AnswerverifiedShow Answer

"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is

Correct AnswerverifiedShow Answer

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