Question 1

Information problems create inefficient outcomes in

Accepted Answer

A)   the private sector but not the public sector.
B)   the public sector but not the private sector.
C)   neither the private nor the public sector.
D)   both the private and the public sectors.E) All of the above
F) None of the above

Question 2

One implication of the median-voter model, as applied to a vote regarding how much government involvement to have in the economy, is that most voters would find the resulting government involvement either too large or too small.

Accepted Answer

A) True 
 B)False

Question 3

It is generally believed that, because of the election process, the incentives and pressures for internal efficiency are stronger in the public sector than in the private sector.

Accepted Answer

A) True 
 B)False

Question 4

It is observed that the person representing the middle position on an issue will most likely determine the outcome of an election. This view is most closely associated with the

Accepted Answer

A)   fallacy of limited decisions.
B)   special-interest effect.
C)   paradox of voting.
D)   median-voter model.E) A) and D)
F) A) and B)

Question 5

Political logrolling always produces economically inefficient outcomes.

Accepted Answer

A) True 
 B)False

Question 6

A 2015 study of hospitals, power plants, and water utilities found that government-owned and operated companies were more likely than private companies to violate health and safety laws. Possible explanations for this include the following, except

Accepted Answer

A)   Government-owned companies may have difficulty getting taxpayers and politicians to approve the funding needed to improve their facilities.
B)   The health and safety laws appear to be applied much more leniently against government-owned companies than against private companies.
C)   Government-owned companies tend to be run by less qualified and less competent managers than the private companies.
D)   Government-owned companies are under less pressure to comply with the laws, because fines for violations are often delayed or even avoided.E) All of the above
F) B) and D)

Question 7

Voters are making a choice to spend money on three projects: a dam, a school, or a road. In the choice between the dam and the school, the majority favors the school. In a choice between a dam and a road, the majority favors a dam. In a choice between a road and a school, the majority favors a road. These rankings indicate that majority voting may

Accepted Answer

A)   result in economically efficient outcomes because of rent-seeking behavior.
B)   reflect irrational preferences.
C)   produce inconsistent choices.
D)   lead to consistent choices in spite of irrational community preferences.E) C) and D)
F) B) and D)

Question 8

Lobbying actions that seek government legislation to provide tax breaks to specific organizations or industries would be an example of

Accepted Answer

A)   how the median-voter model works.
B)   how political choices are bundled.
C)   rent-seeking behavior.
D)   the paradox of voting.E) C) and D)
F) A) and D)

Question 9

The estimated value of the U.S. government's unfunded liability to Social Security is

Accepted Answer

A)   $4.6 trillion.
B)   $4.8 trillion.
C)   $15.6 trillion.
D)   $20.5 trillion.E) C) and D)
F) A) and B)

Question 10

The so-called collective-action problem refers to the fact that

Accepted Answer

A)   it is always difficult to collect fees from users of a service.
B)   larger groups are more difficult to organize and motivate than smaller ones.
C)   larger groups often have more power than smaller groups.
D)   collection agencies often abuse their power over individual consumers.E) All of the above
F) C) and D)

Question 11

Government loan guarantees tend to have the effect of

Accepted Answer

A)   socializing losses and privatizing gains.
B)   socializing gains and privatizing losses.
C)   socializing both gains and losses.
D)   privatizing both gains and losses.E) B) and C)
F) A) and B)

Question 12

In the U.S. market economy, the government performs the following prominent roles, except

Accepted Answer

A)   provide public goods and services.
B)   promote economic stability and growth.
C)   set prices for most resources.
D)   modify the distribution of income.E) B) and C)
F) A) and B)

Question 13

Majority voting assures that government will provide a public good if it yields total benefits in excess of total costs.

Accepted Answer

A) True 
 B)False

Question 14

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) A) and B)
F) A) and C)

Question 15

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 16

(Last Word)  In 2011, Congress funded a sanctuary for white squirrels, a giant roadside coffee pot, and an antique bicycle museum. These are examples of

Accepted Answer

A)   the paradox of voting.
B)   pork barrel politics.
C)   the benefits-received principle.
D)   the adverse selection problem.E) A) and C)
F) B) and D)

Question 17

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of

Accepted Answer

A)   logrolling.
B)   the paradox of voting.
C)   the principal-agent problem.
D)   the median voter model.E) A) and B)
F) A) and C)

Question 18

The trading of votes by elected officials to secure favorable outcomes is called

Accepted Answer

A)   splitting the difference.
B)   social engineering.
C)   logrolling.
D)   grandstanding.E) B) and C)
F) A) and D)

Question 19

Even in a democratic government, elected officials may end up pursuing policies that go against the preferences of the people due to the following reasons, except

Accepted Answer

A)   the special-interest effect.
B)   the invisible hand of the market.
C)   limited and bundled choice in elections.
D)   the majority voting system.E) C) and D)
F) None of the above

Question 20

(Consider This)  According to a 2015 study, health and safety violations are more prevalent in public companies because

Accepted Answer

A)   private companies have greater technical expertise than public companies.
B)   public companies are less likely to be fined for violating health and safety laws than private companies.
C)   laws for public companies are more stringent, making it more difficult for public companies to comply.
D)   public companies are more closely monitored, making it easier to detect violations.E) None of the above
F) All of the above

Exam 5: Governments Role and Government Failure

Majority voting assures that government will provide a public good if it yields total benefits in excess of total costs.

Correct Answer
verified

A 2015 study of hospitals, power plants, and water utilities found that government-owned and operated companies were more likely than private companies to violate health and safety laws. Possible explanations for this include the following, except

Correct Answer
verified

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

The estimated value of the U.S. government's unfunded liability to Social Security is

Correct Answer
verified

It is generally believed that, because of the election process, the incentives and pressures for internal efficiency are stronger in the public sector than in the private sector.

Correct Answer
verified

(Consider This) According to a 2015 study, health and safety violations are more prevalent in public companies because

Correct Answer
verified

The so-called collective-action problem refers to the fact that

Correct Answer
verified

The trading of votes by elected officials to secure favorable outcomes is called

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
verified

Lobbying actions that seek government legislation to provide tax breaks to specific organizations or industries would be an example of

Correct Answer
verified

It is observed that the person representing the middle position on an issue will most likely determine the outcome of an election. This view is most closely associated with the

Correct Answer
verified

One implication of the median-voter model, as applied to a vote regarding how much government involvement to have in the economy, is that most voters would find the resulting government involvement either too large or too small.

Correct Answer
verified

Political logrolling always produces economically inefficient outcomes.

Correct Answer
verified

Even in a democratic government, elected officials may end up pursuing policies that go against the preferences of the people due to the following reasons, except

Correct Answer
verified

(Last Word) In 2011, Congress funded a sanctuary for white squirrels, a giant roadside coffee pot, and an antique bicycle museum. These are examples of

Correct Answer
verified

Government loan guarantees tend to have the effect of

Correct Answer
verified

In the U.S. market economy, the government performs the following prominent roles, except

Correct Answer
verified

Information problems create inefficient outcomes in

Correct Answer
verified

Correct Answer
verified

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of

Correct Answer
verified

Exam 5: Governments Role and Government Failure

Majority voting assures that government will provide a public good if it yields total benefits in excess of total costs.

Correct AnswerverifiedShow Answer

A 2015 study of hospitals, power plants, and water utilities found that government-owned and operated companies were more likely than private companies to violate health and safety laws. Possible explanations for this include the following, except

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

The estimated value of the U.S. government's unfunded liability to Social Security is

Correct AnswerverifiedShow Answer

It is generally believed that, because of the election process, the incentives and pressures for internal efficiency are stronger in the public sector than in the private sector.

Correct AnswerverifiedShow Answer

(Consider This) According to a 2015 study, health and safety violations are more prevalent in public companies because

Correct AnswerverifiedShow Answer

The so-called collective-action problem refers to the fact that

Correct AnswerverifiedShow Answer

The trading of votes by elected officials to secure favorable outcomes is called

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

Lobbying actions that seek government legislation to provide tax breaks to specific organizations or industries would be an example of

Correct AnswerverifiedShow Answer

It is observed that the person representing the middle position on an issue will most likely determine the outcome of an election. This view is most closely associated with the

Correct AnswerverifiedShow Answer

One implication of the median-voter model, as applied to a vote regarding how much government involvement to have in the economy, is that most voters would find the resulting government involvement either too large or too small.

Correct AnswerverifiedShow Answer

Political logrolling always produces economically inefficient outcomes.

Correct AnswerverifiedShow Answer

Even in a democratic government, elected officials may end up pursuing policies that go against the preferences of the people due to the following reasons, except

Correct AnswerverifiedShow Answer

(Last Word) In 2011, Congress funded a sanctuary for white squirrels, a giant roadside coffee pot, and an antique bicycle museum. These are examples of

Correct AnswerverifiedShow Answer

Government loan guarantees tend to have the effect of

Correct AnswerverifiedShow Answer

In the U.S. market economy, the government performs the following prominent roles, except

Correct AnswerverifiedShow Answer

Information problems create inefficient outcomes in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of

Correct AnswerverifiedShow Answer

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