Question 1

The field of economics that analyzes government decision making,politics,and elections is called:

Accepted Answer

A)   public finance.
B)   public choice theory.
C)   collective economics.
D)   political economy.E) All of the above
F) C) and D)

Question 2

(Consider This) Which of the following is an example of voter failure?

Accepted Answer

A)   Voters support adding stop lights that would increase congestion and travel costs without increasing safety or convenience.
B)   Government officials ignore voter calls for regulations that would reduce negative externalities and enhance efficiency.
C)   Voters wanting greater highway safety are unable to express their preferences on how to achieve it because the voting system doesn't allow it.
D)   Voters wanting more government services are divided on what services they most prefer,leaving government officials to determine what is best.E) A) and B)
F) None of the above

Question 3

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Accepted Answer

A)   paradox of voting.
B)   median-voter model.
C)   law of diminishing marginal utility.
D)   ability-to-pay principle.E) B) and D)
F) B) and C)

Question 4

Government fiscal policy involves changing which of the following?

Accepted Answer

A)   Interest rates.
B)   Taxes and government spending.
C)   Regulations on business.
D)   The amount of money in circulation.E) None of the above
F) B) and C)

Question 5

The government's ability to coerce can enhance economic efficiency by:

Accepted Answer

A)   eliminating income inequality.
B)   correcting market failures.
C)   preventing resources from going to their most valued uses.
D)   restraining self-interest.E) B) and C)
F) A) and D)

Question 6

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

Accepted Answer

A)   fiscal policy
B)   monetary policy
C)   unfunded liabilities
D)   budget deficitsE) B) and D)
F) A) and B)

Question 7

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

Question 8

Suppose that friends Jennifer,Stephanie,and Megan cannot agree on how much to spend for a bouquet of flowers to send to a person that allowed them to use their beach house for the weekend.Jennifer wants to buy a moderately priced bouquet,Stephanie wants to buy an expensive bouquet,and Megan wants to buy a very expensive bouquet.Assuming no paradox of voting,majority voting will result in the decision to buy:

Accepted Answer

A)   an inexpensive bouquet.
B)   a very expensive bouquet.
C)   a moderately priced bouquet.
D)   an expensive bouquet.E) B) and D)
F) A) and B)

Question 9

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Accepted Answer

A)   the paradox of voting.
B)   logrolling.
C)   the benefits-received principle.
D)   adverse selection.E) A) and B)
F) C) and D)

Question 10

Fiscal policy is more susceptible to politicization than monetary policy.

Accepted Answer

A) True 
 B)False

Question 11

In corporations,owners are __________________ and managers are ________________.

Accepted Answer

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

Question 12

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

Accepted Answer

A)   moral hazard.
B)   the principal-agent problem.
C)   logrolling.
D)   rent-seeking behavior.E) A) and B)
F) A) and C)

Question 13

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?

Accepted Answer

A)   Weakening enforcement of laws and contracts.
B)   Promising to cover every risk of loss for private firms.
C)   Coercing all firms to innovate and invest.
D)   Taxing polluters and subsidizing firms that are creating significant positive externalities.E) B) and D)
F) B) and C)

Question 14

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

Accepted Answer

A) True 
 B)False

Question 15

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 16

The unlawful misdirection of governmental resources for personal gain is known as:

Accepted Answer

A)   political corruption.
B)   logrolling.
C)   adverse selection.
D)   the special-interest effect.E) C) and D)
F) All of the above

Question 17

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Accepted Answer

A) True 
 B)False

Question 18

Changes in tax rates are a form of monetary policy.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Accepted Answer

A)   principal-agent problem.
B)   benefits-received principle.
C)   median-voter model.
D)   paradox of voting.E) All of the above
F) None of the above

Question 20

"Government failure" is a prominent topic in:

Accepted Answer

A)   public choice theory.
B)   Keynesian economics.
C)   socialist theory.
D)   behavioral economics.E) B) and C)
F) C) and D)

Exam 5: Governments Role and Government Failure

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

Correct Answer
verified

Fiscal policy is more susceptible to politicization than monetary policy.

Correct Answer
verified

The unlawful misdirection of governmental resources for personal gain is known as:

Correct Answer
verified

Changes in tax rates are a form of monetary policy.

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

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Correct Answer
verified

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Correct Answer
verified

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Correct Answer
verified

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

Correct Answer
verified

The government's ability to coerce can enhance economic efficiency by:

Correct Answer
verified

"Government failure" is a prominent topic in:

Correct Answer
verified

(Consider This) Which of the following is an example of voter failure?

Correct Answer
verified

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

Correct Answer
verified

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?

Correct Answer
verified

In corporations,owners are __ and managers are .

Correct Answer
verified

The field of economics that analyzes government decision making,politics,and elections is called:

Correct Answer
verified

Government fiscal policy involves changing which of the following?

Correct Answer
verified

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Correct Answer
verified

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

Correct Answer
verified

Correct Answer
verified

Exam 5: Governments Role and Government Failure

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

Correct AnswerverifiedShow Answer

Fiscal policy is more susceptible to politicization than monetary policy.

Correct AnswerverifiedShow Answer

The unlawful misdirection of governmental resources for personal gain is known as:

Correct AnswerverifiedShow Answer

Changes in tax rates are a form of monetary policy.

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

"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:

Correct AnswerverifiedShow Answer

Even if a majority of the population wants a law and the law is passed,the outcome may still be economically inefficient.

Correct AnswerverifiedShow Answer

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Correct AnswerverifiedShow Answer

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

Correct AnswerverifiedShow Answer

The government's ability to coerce can enhance economic efficiency by:

Correct AnswerverifiedShow Answer

"Government failure" is a prominent topic in:

Correct AnswerverifiedShow Answer

(Consider This) Which of the following is an example of voter failure?

Correct AnswerverifiedShow Answer

To reduce politicization of policy making,many countries have given control of ________ to politically independent central banks.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

In corporations,owners are __________________ and managers are ________________.

Correct AnswerverifiedShow Answer

The field of economics that analyzes government decision making,politics,and elections is called:

Correct AnswerverifiedShow Answer

Government fiscal policy involves changing which of the following?

Correct AnswerverifiedShow Answer

Some people argue that the three main television networks all have similar programming.If true,this observation might best be explained by the:

Correct AnswerverifiedShow Answer

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions.This would be an example of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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In corporations,owners are __ and managers are .

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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