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Exam 5: Governments Role and Government Failure

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Question 21

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Suppose a college economics department decides to use a single economics text for all sections of principles of economics.Also assume that the three individual members of the textbook selection committee have the following preferences. Assuming all other textbook qualities except analytical level are the same,paired-choice majority voting will result in the committee:

A) being deadlocked and unable to decide on a book.
B) selecting the C/F book.
C) selecting the M/B book.
D) selecting the O/S book.

E) C) and D)
F) A) and B)

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Question 22

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Which of the following would be the best example of regulatory capture?

A) Starbucks buys up all the available supplies of coffee beans.
B) Nike executives influence the rules for track and field events.
C) Federal law makers write and pass legislation that protects domestic companies from foreign competition.
D) Executives from the Ford,General Motors,and Chrysler companies write the rules regulating automobile safety and fuel requirements.

E) None of the above
F) A) and C)

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Question 23

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The principal-agent problem is a problem for the private sector but does not apply to political decision making.

Factors that impede the attainment of economic efficiency in the public sector are called:

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

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:

The size and scope of government inhibit the flow of information to decision makers,leading to inefficient outcomes.

Proponents of deregulation point to all of the following industries as examples of successful deregulation except for:

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

The government of Southland wants to improve resource allocation in the country.Which of the following actions by the Southland government is most likely to accomplish this?

Public choice theory focuses on the economics of:

The idea of government failure includes all of the following except:

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:

A government using fiscal policy in an attempt to stimulate the economy would do which of the following?

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:

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

Because of the force of law and bureaucratic structure,government accountability is less of a problem than in the private sector.

The pursuit through government of a transfer of wealth at society's expense is called "rent seeking."

As it relates to owners and managers,the principal-agent problem results from the:

Fiscal policy is more susceptible to politicization than monetary policy.