Question 1

Exhibit 16.6
 
-Refer to Exhibit 16.6,which shows the market faced by a monopolist.Suppose the government decides to give monopoly power to one firm in the industry through an exclusive license.According to the theory of rent seeking,the maximum amount that the monopolist would spend on rent seeking to get that license is _____

Accepted Answer

A)  $500,000.
B)  $8.
C)  $250,000.
D)  $150,000.
E)  $75,000.F) None of the above
G) A) and D)

Question 2

Suppose the legislature of the Democratic Republic of Marina proposes a 10 percent national income tax that would be used to fund universal health care,literacy,and access to the justice system for all citizens.This legislation is an example of _____

Accepted Answer

A)  traditional public-goods legislation.
B)  special-interest legislation.
C)  competing-interest legislation.
D)  populist legislation.
E)  quasi legislation.F) A) and D)
G) A) and C)

Question 3

Elected officials try to maximize their _____

Accepted Answer

A)  political support.
B)  funding.
C)  spending.
D)  election promises.
E)  utility.F) A) and B)
G) A) and C)

Question 4

A good that is neither rival nor exclusive is called a(n) _____

Accepted Answer

A)  private good.
B)  public good.
C)  quasi-private good.
D)  external good.
E)  open-access good.F) C) and E)
G) A) and B)

Question 5

If voters moved abroad to express dissatisfaction with the federal government,they _____

Accepted Answer

A)  do not have to pay U.S. federal taxes on worldwide income.
B)  still have to pay U.S. federal taxes on worldwide income.
C)  will have promoted some efficiency and consumer satisfaction.
D)  have less incentive to eliminate waste and inefficiency.
E)  eliminate any excess demand generated in a market.F) A) and B)
G) All of the above

Question 6

The underground economy describes all market activity that _____

Accepted Answer

A)  goes unreported either to evade taxes or because the activity itself is legal.
B)  goes unreported either to evade taxes or because the activity itself is illegal.
C)  is reported either to evade taxes or because the activity itself is legal.
D)  is reported either to evade taxes or because the activity itself is illegal.
E)  is offshore.F) D) and E)
G) B) and D)

Question 7

Which of the following is true of the median-voter model?

Accepted Answer

A)  Public choices determined by the median voter are not optimal.
B)  The median voter is always a part of the losing side.
C)  Under certain conditions, the median voter determines which outcome wins.
D)  Public choices determined by the median voter are not rational.
E)  Public choices determined by the median voter ensure that each individual gets whatever amount he or she is willing and able to buy.F) A) and B)
G) B) and C)

Question 8

Exhibit 16.2
 
-Refer to Exhibit 16.2.In Box 1,an example of traditional public-goods legislation is that for _____

Accepted Answer

A)  national defense.
B)  tort reform.
C)  farm subsidies.
D)  labor union issues.
E)  rent-seeking.F) B) and D)
G) All of the above

Question 9

To maximize political support,elected officials may cater to _____

Accepted Answer

A)  public interest rather than serve the special interests.
B)  special interests rather than serve the public interest.
C)  taxpayers rather than serve the retirees.
D)  retirees rather than serve the taxpayer.
E)  journalists.F) B) and D)
G) B) and E)

Question 10

Elected officials _____

Accepted Answer

A)  may only use firms to produce the desired output.
B)  may only use bureaus to produce the desired output.
C)  may use a combination of bureaus and firms to produce the desired output.
D)  may be better able to control the details of production in bureaus than in private firms.
E)  will not be able to sell the good or service produced by a private firm because of their low quality.F) D) and E)
G) A) and C)

Question 11

If taxpayers can enjoy mosquito abatement without paying for it,they tend to understate their true valuation of mosquito control measures.This is an example of _____

Accepted Answer

A)  a natural monopoly.
B)  the median-voter model.
C)  an open-access good.
D)  the free-rider problem.
E)  irrational ignorance.F) A) and C)
G) C) and E)

Question 12

A study found that privately operated juvenile correction facilities in Florida had _____ costs but experienced _____ rates of recidivism than state-operated juvenile corrections facilities.

Accepted Answer

A)  lower; higher
B)  lower; lower
C)  higher; equivalent
D)  higher; lower
E)  lower; equivalentF) A) and D)
G) A) and B)

Question 13

In response to the threat of budget cuts,the Connecticut State Department of Recreation proposed shutting down many state parks and beaches.This is an example of _____

Accepted Answer

A)  cost efficiency in bureaus.
B)  budget maximizing by bureaus.
C)  the median-voter model.
D)  logrolling.
E)  direct democracy.F) A) and E)
G) A) and D)

Question 14

Campaign finance reform is usually proposed _____

Accepted Answer

A)  as a way of reducing the power of special-interest groups.
B)  as a form of rent seeking.
C)  by economists as a way of implementing the median-voter model.
D)  by political action committees.
E)  by the Justice Department.F) A) and B)
G) C) and E)

Question 15

Under which of the following circumstances would a voter adopt a stance of rational ignorance instead of choosing to be informed of the public choices at hand in an election?

Accepted Answer

A)  when the benefit consumers anticipate from becoming informed exceeds the anticipated cost of doing so
B)  when the voters have a special interest in the legislation
C)  when information and the time required to acquire and digest it are scarce
D)  when the median voter in an electorate determines public choices
E)  when political candidates try to get elected by appealing to the median voterF) D) and E)
G) A) and C)

Question 16

Rationality implies that in order to get what they want,people will spend the most time and effort _____

Accepted Answer

A)  making private market decisions.
B)  electing the median voter.
C)  investigating political candidates' platforms.
D)  supplying more of the taxed resource so that their disposable income does not decline.
E)  understating their true valuation of public goods and services.F) B) and C)
G) C) and D)

Question 17

Special-interest legislation is characterized by _____

Accepted Answer

A)  concentrated costs and concentrated benefits.
B)  concentrated benefits and widespread costs.
C)  widespread benefits and widespread costs.
D)  widespread benefits and concentrated costs.
E)  zero costs.F) C) and D)
G) A) and B)

Question 18

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) _____

Accepted Answer

A)  private good.
B)  natural monopoly.
C)  open-access good.
D)  public good.
E)  quasi-private good.F) A) and B)
G) A) and E)

Question 19

A public good,such as a community's emergency warning sirens,typically _____

Accepted Answer

A)  imposes benefits on only a few individuals but imposes costs on many people.
B)  imposes both benefits and costs on relatively few individuals.
C)  imposes benefits on many individuals but imposes costs on relatively few people.
D)  imposes both benefits and costs on many individuals.
E)  imposes costs on individuals only when logrolling is prevalent in the government.F) A) and E)
G) None of the above

Question 20

Payments higher than necessary to call forth a resource are known as _____

Accepted Answer

A)  profits.
B)  rents.
C)  consumer surplus.
D)  opportunity costs.
E)  subsidies.F) A) and B)
G) C) and D)

Exam 16: Public Goods and Public Choice

If voters moved abroad to express dissatisfaction with the federal government,they _____

Correct Answer
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To maximize political support,elected officials may cater to _____

Correct Answer
verified

Suppose the legislature of the Democratic Republic of Marina proposes a 10 percent national income tax that would be used to fund universal health care,literacy,and access to the justice system for all citizens.This legislation is an example of _____

Correct Answer
verified

Exhibit 16.2 -Refer to Exhibit 16.2.In Box 1,an example of traditional public-goods legislation is that for _____

Correct Answer
verified

The underground economy describes all market activity that _____

Correct Answer
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Which of the following is true of the median-voter model?

Correct Answer
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A study found that privately operated juvenile correction facilities in Florida had _ costs but experienced _ rates of recidivism than state-operated juvenile corrections facilities.

Correct Answer
verified

Rationality implies that in order to get what they want,people will spend the most time and effort _____

Correct Answer
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Correct Answer
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Campaign finance reform is usually proposed _____

Correct Answer
verified

Payments higher than necessary to call forth a resource are known as _____

Correct Answer
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Special-interest legislation is characterized by _____

Correct Answer
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A public good,such as a community's emergency warning sirens,typically _____

Correct Answer
verified

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) _____

Correct Answer
verified

Elected officials _____

Correct Answer
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If taxpayers can enjoy mosquito abatement without paying for it,they tend to understate their true valuation of mosquito control measures.This is an example of _____

Correct Answer
verified

In response to the threat of budget cuts,the Connecticut State Department of Recreation proposed shutting down many state parks and beaches.This is an example of _____

Correct Answer
verified

Elected officials try to maximize their _____

Correct Answer
verified

Under which of the following circumstances would a voter adopt a stance of rational ignorance instead of choosing to be informed of the public choices at hand in an election?

Correct Answer
verified

A good that is neither rival nor exclusive is called a(n) _____

Correct Answer
verified

Exam 16: Public Goods and Public Choice

If voters moved abroad to express dissatisfaction with the federal government,they _____

Correct AnswerverifiedShow Answer

To maximize political support,elected officials may cater to _____

Correct AnswerverifiedShow Answer

Suppose the legislature of the Democratic Republic of Marina proposes a 10 percent national income tax that would be used to fund universal health care,literacy,and access to the justice system for all citizens.This legislation is an example of _____

Correct AnswerverifiedShow Answer

Exhibit 16.2 -Refer to Exhibit 16.2.In Box 1,an example of traditional public-goods legislation is that for _____

Correct AnswerverifiedShow Answer

The underground economy describes all market activity that _____

Correct AnswerverifiedShow Answer

Which of the following is true of the median-voter model?

Correct AnswerverifiedShow Answer

A study found that privately operated juvenile correction facilities in Florida had _____ costs but experienced _____ rates of recidivism than state-operated juvenile corrections facilities.

Correct AnswerverifiedShow Answer

Rationality implies that in order to get what they want,people will spend the most time and effort _____

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Campaign finance reform is usually proposed _____

Correct AnswerverifiedShow Answer

Payments higher than necessary to call forth a resource are known as _____

Correct AnswerverifiedShow Answer

Special-interest legislation is characterized by _____

Correct AnswerverifiedShow Answer

A public good,such as a community's emergency warning sirens,typically _____

Correct AnswerverifiedShow Answer

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) _____

Correct AnswerverifiedShow Answer

Elected officials _____

Correct AnswerverifiedShow Answer

If taxpayers can enjoy mosquito abatement without paying for it,they tend to understate their true valuation of mosquito control measures.This is an example of _____

Correct AnswerverifiedShow Answer

In response to the threat of budget cuts,the Connecticut State Department of Recreation proposed shutting down many state parks and beaches.This is an example of _____

Correct AnswerverifiedShow Answer

Elected officials try to maximize their _____

Correct AnswerverifiedShow Answer

Under which of the following circumstances would a voter adopt a stance of rational ignorance instead of choosing to be informed of the public choices at hand in an election?

Correct AnswerverifiedShow Answer

A good that is neither rival nor exclusive is called a(n) _____

Correct AnswerverifiedShow Answer

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A study found that privately operated juvenile correction facilities in Florida had _ costs but experienced _ rates of recidivism than state-operated juvenile corrections facilities.

Correct Answer
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Correct Answer
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Correct Answer
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