Question 1

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

Accepted Answer

A)  a majority of voters would favor education.
B)  no voter decision is possible.
C)  a majority of voters would favor public safety.
D)  the outcome would depend on which item was listed first on the ballot.E) B) and C)
F) B) and D)

Question 2

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 are likely to 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) B) and D)
F) C) and D)

Question 3

Professional sports teams will sometimes seek public subsidies for stadium financing projects that produce large benefits for a relatively small number of fans and impose small costs on a relatively large number of people.Sometimes these efforts to secure public funding are successful even though the decision is not efficient.This is an example of

Accepted Answer

A)  log-rolling.
B)  pork-barrel politics.
C)  the special-interest effect.
D)  market failure.E) None of the above
F) All of the above

Question 4

One major role that the government plays in the market economy of the U.S.is

Accepted Answer

A)  setting production targets for major industries.
B)  requiring minimum levels of employment in major industries.
C)  allocating resources in various market activities.
D)  setting laws governing economic activity.E) A) and D)
F) All of the above

Question 5

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) A) and B)
F) None of the above

Question 6

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.Difficulty: 02 MediumE) B) and C)
F) C) and D)

Question 7

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) All of the above
F) C) and D)

Question 8

The collective action problem is the reason why there are no lobbyists representing the interest of general taxpayers or consumers in Washington, DC.

Accepted Answer

A) True 
 B)False

Question 9

During a period when output and employment are falling, the government will try to

Accepted Answer

A)  increase tax rates.
B)  increase interest rates.
C)  reduce government spending.
D)  stimulate borrowing and spending.E) A) and C)
F) All of the above

Question 10

The difficulties in managing government in a market economy include the following, except

Accepted Answer

A)  the need for complex bureaucracy of various levels.
B)  the need for detailed paperwork and inflexibility.
C)  the close resemblance of government to the "invisible hand."
D)  the lack of accountability in government.E) A) and C)
F) B) and C)

Question 11

The sometimes inconsistent results coming from a series of paired-choice voting is due to

Accepted Answer

A)  voters changing their preferences.
B)  irrational preferences among some voters.
C)  a normal consequence of majority voting.
D)  voters not having a good idea of their preferences.E) B) and D)
F) B) and C)

Question 12

Because majority voting fails to incorporate the strength of the preferences of individual voters, it

Accepted Answer

A)  creates negative externalities.
B)  under some circumstances produces economically inefficient outcomes.
C)  leads to market failure.
D)  leads to politics dominated by special-interest groups.E) C) and D)
F) A) and B)

Question 13

Assume that Abby, Ben, and Clara are the only citizens in a community.A proposed public good has a total cost of $1,000.All three citizens will share an equal portion of this cost in taxes.The benefit of the public good is $400 each to Abby, Ben, and Clara.In a majority vote, this proposal will most likely be

Accepted Answer

A)  accepted; the public good is produced, even though it is economically inefficient.
B)  defeated; the public good is not produced, even though it would have been efficient to do so.
C)  accepted; the public good is produced, which is economically efficient.
D)  defeated; the public good is not produced, which is the proper outcome.E) B) and C)
F) C) and D)

Question 14

When fiscal and monetary policies become highly politicized, these policies tend to

Accepted Answer

A)  become more effective at stabilizing the economy.
B)  lose any effect at all on the economy.
C)  become destabilizing, instead of promoting stability.
D)  lead to rising budget surpluses.E) All of the above
F) None of the above

Question 15

Logrolling can either increase or diminish economic efficiency.

Accepted Answer

A) True 
 B)False

Question 16

Nobody gains from pork-barrel politics other than the politicians.

Accepted Answer

A) True 
 B)False

Question 17

When congressional representatives vote on an appropriations bill, they must vote yea or nay, taking the bad with the good.This statement best reflects the

Accepted Answer

A)  paradox of voting.
B)  regulatory capture effect.
C)  benefits-received principle.
D)  concept of limited and bundled choices.E) B) and D)
F) A) and B)

Question 18

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) None of the above
F) B) and C)

Question 19

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) A) and B)
F) A) and D)

Question 20

Monetary policy attempts to change the level of spending by altering interest rates.

Accepted Answer

A) True 
 B)False

Exam 5: Governments Role and Government Failure

The collective action problem is the reason why there are no lobbyists representing the interest of general taxpayers or consumers in Washington, DC.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

During a period when output and employment are falling, the government will try to

Correct Answer
verified

The difficulties in managing government in a market economy include the following, except

Correct Answer
verified

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

Correct Answer
verified

The sometimes inconsistent results coming from a series of paired-choice voting is due to

Correct Answer
verified

Correct Answer
verified

Nobody gains from pork-barrel politics other than the politicians.

Correct Answer
verified

Logrolling can either increase or diminish economic efficiency.

Correct Answer
verified

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

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

Correct Answer
verified

Monetary policy attempts to change the level of spending by altering interest rates.

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

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

Correct Answer
verified

One major role that the government plays in the market economy of the U.S.is

Correct Answer
verified

Because majority voting fails to incorporate the strength of the preferences of individual voters, it

Correct Answer
verified

When congressional representatives vote on an appropriations bill, they must vote yea or nay, taking the bad with the good.This statement best reflects the

Correct Answer
verified

When fiscal and monetary policies become highly politicized, these policies tend to

Correct Answer
verified

Exam 5: Governments Role and Government Failure

The collective action problem is the reason why there are no lobbyists representing the interest of general taxpayers or consumers in Washington, DC.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During a period when output and employment are falling, the government will try to

Correct AnswerverifiedShow Answer

The difficulties in managing government in a market economy include the following, except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The sometimes inconsistent results coming from a series of paired-choice voting is due to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Nobody gains from pork-barrel politics other than the politicians.

Correct AnswerverifiedShow Answer

Logrolling can either increase or diminish economic efficiency.

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Monetary policy attempts to change the level of spending by altering interest rates.

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

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

Correct AnswerverifiedShow Answer

One major role that the government plays in the market economy of the U.S.is

Correct AnswerverifiedShow Answer

Because majority voting fails to incorporate the strength of the preferences of individual voters, it

Correct AnswerverifiedShow Answer

When congressional representatives vote on an appropriations bill, they must vote yea or nay, taking the bad with the good.This statement best reflects the

Correct AnswerverifiedShow Answer

When fiscal and monetary policies become highly politicized, these policies tend to

Correct AnswerverifiedShow Answer

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