Question 1

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

Accepted Answer

A) True 
 B)False

Question 2

Interest groups result when people

Accepted Answer

A)  in a certain zip code vote together.
B)  who share strong preferences on a choice band together.
C)  do not all vote in elections.
D)  do not have strong preferences on the issues to be voted on.E) None of the above
F) B) and C)

Question 3

The government's budget deficit refers to the

Accepted Answer

A)  total amount of debt that the government has incurred over the years.
B)  difference between the nation's amount of exports and its total amount of imports.
C)  gap between government spending and its lower tax revenues.
D)  decrease in the amount of government spending from one year to the next.E) B) and D)
F) All of the above

Question 4

Unintended consequences can result from the government's desire to enforce laws uniformly.

Accepted Answer

A) True 
 B)False

Question 5

Political logrolling, or vote trading, can turn a potentially inefficient voting outcome into an efficient one.

Accepted Answer

A) True 
 B)False

Question 6

Economists widely support deregulation of industries that tend toward monopoly or generate substantial negative externalities.

Accepted Answer

A) True 
 B)False

Question 7

Which statement best describes a special-interest issue?

Accepted Answer

A)  It is a program or policy that is adopted during a special session of Congress or a state legislature.
B)  It is a policy issue in which both the supporters and opponents employ paid lobbyists to represent their interests.
C)  It is a program or policy which one political party strongly supports and other political parties strongly oppose.
D)  It is a program or policy in which a large number of people will suffer small costs, while a small number will receive large gains.E) All of the above
F) None of the above

Question 8

One implication of the median-voter model is that at any point in time, most voters will

Accepted Answer

A)  be happy with the amount of government involvement in the economy.
B)  find government involvement in the economy to be too much.
C)  find government involvement in the economy to be too little.
D)  be unhappy with the amount of government involvement in the economy.E) All of the above
F) A) and C)

Question 9

In representative democracy, voters are and politicians are _.

Accepted Answer

A)  agents; principals
B)  logrollers; principals
C)  agents; employees
D)  principals; agentsE) A) and B)
F) B) and D)

Question 10

(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) B) and D)
F) All of the above

Question 11

Public choice economists

Accepted Answer

A)  analyze the incidence of taxes.
B)  are also known as Keynesian economists.
C)  use the tools of economics to analyze decision making, politics, and elections in the public sector.
D)  are, by definition, economists employed by federal, state, and local governments.E) A) and B)
F) A) and C)

Question 12

All of the following are consequences of a government's having to deal with a "debt crisis," except

Accepted Answer

A)  very restricted ability to borrow money.
B)  being forced to drastically raise taxes.
C)  being forced to make drastic cuts in spending.
D)  being forced to make huge increases in government spending.E) A) and C)
F) B) and D)

Question 13

Monetary and fiscal policies are tools that the government can use to try to stabilize the economy.

Accepted Answer

A) True 
 B)False

Question 14

In the U.S., the Federal government runs a chronic budget deficit, whereas many state and local governments do not, because

Accepted Answer

A)  many state and local governments have balanced-budget laws that make deficits illegal, while the Federal government does not.
B)  voters in Federal elections tend to favor budget deficits, while voters in state and local elections do not.
C)  many state and local governments face stricter accounting standards than the Federal government does.
D)  elections at the state and local levels tend to occur more frequently than at the Federal level.E) All of the above
F) B) and C)

Question 15

In the corporate world of business, the principal-agent problem arises between

Accepted Answer

A)  workers and managers.
B)  managers and stockholders.
C)  stockholders and bondholders.
D)  corporations and their banks.E) A) and C)
F) A) and D)

Question 16

The so-called pork-barrel politics refers to congressional members

Accepted Answer

A)  trading votes with one another.
B)  receiving perks and freebies from businesses trying to sway their votes.
C)  paying not much attention to the vocal special-interest groups.
D)  inserting provisions for local narrow projects into comprehensive legislation.E) A) and B)
F) B) and D)

Question 17

Government laws and policies need to be uniformly enforced.But this leads to all of the following problems, except

Accepted Answer

A)  inflexibility.
B)  massive paperwork.
C)  excessively detailed rules.
D)  haphazard application.E) None of the above
F) A) and B)

Question 18

The government's ability to force people to do things can increase economic efficiency.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the best example of rent-seeking behavior?

Accepted Answer

A)  Voters consider a ballot measure that would increase taxes to better fund schools.
B)  Students at a university lobby the administration to improve dorms and reduce class sizes without increasing tuition.
C)  Consumers try to get flying cars produced by telling automakers they are willing to pay for them.
D)  Senators vote for what their constituents want so they can get reelected.E) A) and D)
F) A) and C)

Question 20

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 park and a jail,

Accepted Answer

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

Exam 5: Governments Role and Government Failure

Public choice economists

Correct AnswerverifiedShow Answer

The so-called pork-barrel politics refers to congressional members

Correct AnswerverifiedShow Answer

The government's budget deficit refers to the

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

In representative democracy, voters are and politicians are _.

Correct AnswerverifiedShow Answer

Government laws and policies need to be uniformly enforced.But this leads to all of the following problems, except

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 park and a jail,

Correct AnswerverifiedShow Answer

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

Correct AnswerverifiedShow Answer

Which of the following is the best example of rent-seeking behavior?

Correct AnswerverifiedShow Answer

In the corporate world of business, the principal-agent problem arises between

Correct AnswerverifiedShow Answer

Economists widely support deregulation of industries that tend toward monopoly or generate substantial negative externalities.

Correct AnswerverifiedShow Answer

Political logrolling, or vote trading, can turn a potentially inefficient voting outcome into an efficient one.

Correct AnswerverifiedShow Answer

Which statement best describes a special-interest issue?

Correct AnswerverifiedShow Answer

In the U.S., the Federal government runs a chronic budget deficit, whereas many state and local governments do not, because

Correct AnswerverifiedShow Answer

One implication of the median-voter model is that at any point in time, most voters will

Correct AnswerverifiedShow Answer

Monetary and fiscal policies are tools that the government can use to try to stabilize the economy.

Correct AnswerverifiedShow Answer

Unintended consequences can result from the government's desire to enforce laws uniformly.

Correct AnswerverifiedShow Answer

All of the following are consequences of a government's having to deal with a "debt crisis," except

Correct AnswerverifiedShow Answer

The government's ability to force people to do things can increase economic efficiency.

Correct AnswerverifiedShow Answer

Interest groups result when people

Correct AnswerverifiedShow Answer

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