Question 1

Presidents have an easier time changing ________ than ________ during an election year.

Accepted Answer

A)   GDP; taxes and transfer payments
B)   the overall economy; GDP
C)   taxes and transfer payments; GDP
D)   GDP; overall economyE) A) and B)
F) A) and C)

Question 2

The basic concept behind the median voter theorem is that:
I. the median voter is defined as the voter for which half of the other voters want a policy to the left and half of the voters want a policy to the right.
II. when voters vote, regardless of whether they vote closest to their preferences or not, the preference of the median voter is sure to win in a majority win election.
III. if voters vote closest to their preferences, then the preference of the median voter is sure to win in a majority win election.

Accepted Answer

A)   I only
B)   I and II only
C)   I and III only
D)   III onlyE) A) and C)
F) B) and C)

Question 3

The free flow of ideas helps both the market and government to function better.

Accepted Answer

A) True 
 B)False

Question 4

When the costs of a good are paid for by nonconsumers, ______ of the good is produced.

Accepted Answer

A)   an inefficiently small amount
B)   an efficient amount
C)   an inefficiently large amount
D)   noneE) All of the above
F) C) and D)

Question 5

Which of the following is most likely to happen just before an election?

Accepted Answer

A)   higher taxes
B)   low unemployment
C)   higher inflation
D)   higher government spendingE) B) and C)
F) A) and B)

Question 6

________ argues that ________.

Accepted Answer

A)   Amartya Sen; famines don't happen in democracies
B)   Rico Raines; starvation in many parts of the world could be avoided with adequate price controls
C)   Amartya Sen; famines are more likely to occur where there are unfettered newspapers and political competition
D)   David Ricardo; mass starvations are more likely in democraciesE) A) and B)
F) All of the above

Question 7

When citizens have NOT satisfied their basic needs for food, shelter and security, they still demand more cerebral goods.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions: Figure: Median Voter 2 
-(Figure: Median Voter 2)  What tax level could Jack Johnson support to ensure a victory in the election?

Accepted Answer

A)   5%
B)   6%
C)   7%
D)   8%E) All of the above
F) A) and B)

Question 9

It is always irrational to be ignorant.

Accepted Answer

A) True 
 B)False

Question 10

At one time, even coffee roasting was defined as a form of manufacturing.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Accepted Answer

A)   Agricultural interests seek a redistribution of income favoring themselves.
B)   Price support programs reduce food costs, which helps the poor.
C)   Subsidies promote the efficient use of agricultural resources.
D)   Without the farm subsidies, food shortages would result.E) All of the above
F) B) and D)

Question 12

The median voter is the voter such that half of the voters are on one side of the issue and the other half of the voters are on the other side of the issue.

Accepted Answer

A) True 
 B)False

Question 13

When a policy is highly visible, appears often in the newspapers, and has a major effect on the lives of millions of Americans, very often:

Accepted Answer

A)   special interests get their way.
B)   voters get their way.
C)   politicians get their way.
D)   government gets its way.E) A) and B)
F) B) and D)

Question 14

Ignorance is

Accepted Answer

A)   rational only in extreme cases.
B)   never rational.
C)   always rational.
D)   sometimes rational.E) A) and B)
F) A) and C)

Question 15

Representative John Murphy has secured around $200 million of federal government money for a small airport near Juneburg, PA, that averages about 30 passengers a day. The costs of this government support:

Accepted Answer

A)   represent an external cost paid mostly by taxpayers who will never use the airport.
B)   are well justified given that the benefits of the airport are locally concentrated.
C)   are well justified given that the residents near the airport would pay little of the cost.
D)   represent an external cost paid mostly by taxpayers who will begin to use the airport once it is completed.E) A) and B)
F) C) and D)

Question 16

Much to the chagrin of some Americans, conventional light bulbs were effectively banned in 2014 leaving only compact florescent lights (CFLs)  on store shelves. The ban was encouraged, in part, by the makers of the more expensive CFLs. Which concept is best captured in this story?

Accepted Answer

A)   rational ignorance
B)   opportunity cost
C)   diffused costs and concentrated benefits
D)   median voter theoremE) All of the above
F) C) and D)

Question 17

When government makes it possible to push the costs of a good onto other people we get too much of the good.

Accepted Answer

A) True 
 B)False

Question 18

Arguably, one of the best ways to explain why Americans seemingly know very little about current government policies or the state of the economy is that:

Accepted Answer

A)   the quality of American education is poor.
B)   this information is not readily available to the general public.
C)   the time and resources it costs to attain and process this information is more than the benefit received from having this information.
D)   people are irrationally ignorant.E) None of the above
F) A) and D)

Question 19

Special interest groups have an incentive to be:

Accepted Answer

A)   rationally ignorant.
B)   rationally informed.
C)   free riders.
D)   forced riders.E) B) and D)
F) None of the above

Question 20

Public choice is the study of:

Accepted Answer

A)   how choices are made without economic theory.
B)   how the general public is affected by government policies.
C)   irrational behavior of individuals.
D)   political behavior in the context of economics.E) A) and B)
F) None of the above

Exam 20: Political Economy and Public Choice

Arguably, one of the best ways to explain why Americans seemingly know very little about current government policies or the state of the economy is that:

Correct Answer
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Public choice is the study of:

Correct Answer
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Much to the chagrin of some Americans, conventional light bulbs were effectively banned in 2014 leaving only compact florescent lights (CFLs) on store shelves. The ban was encouraged, in part, by the makers of the more expensive CFLs. Which concept is best captured in this story?

Correct Answer
verified

The free flow of ideas helps both the market and government to function better.

Correct Answer
verified

When the costs of a good are paid for by nonconsumers, ______ of the good is produced.

Correct Answer
verified

Correct Answer
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Representative John Murphy has secured around $200 million of federal government money for a small airport near Juneburg, PA, that averages about 30 passengers a day. The costs of this government support:

Correct Answer
verified

Presidents have an easier time changing than during an election year.

Correct Answer
verified

Which of the following is most likely to happen just before an election?

Correct Answer
verified

At one time, even coffee roasting was defined as a form of manufacturing.

Correct Answer
verified

When government makes it possible to push the costs of a good onto other people we get too much of the good.

Correct Answer
verified

Ignorance is

Correct Answer
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Use the following to answer questions: Figure: Median Voter 2 -(Figure: Median Voter 2) What tax level could Jack Johnson support to ensure a victory in the election?

Correct Answer
verified

The median voter is the voter such that half of the voters are on one side of the issue and the other half of the voters are on the other side of the issue.

Correct Answer
verified

It is always irrational to be ignorant.

Correct Answer
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Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Correct Answer
verified

When a policy is highly visible, appears often in the newspapers, and has a major effect on the lives of millions of Americans, very often:

Correct Answer
verified

Special interest groups have an incentive to be:

Correct Answer
verified

When citizens have NOT satisfied their basic needs for food, shelter and security, they still demand more cerebral goods.

Correct Answer
verified

argues that .

Correct Answer
verified

Exam 20: Political Economy and Public Choice

Arguably, one of the best ways to explain why Americans seemingly know very little about current government policies or the state of the economy is that:

Correct AnswerverifiedShow Answer

Public choice is the study of:

Correct AnswerverifiedShow Answer

Much to the chagrin of some Americans, conventional light bulbs were effectively banned in 2014 leaving only compact florescent lights (CFLs) on store shelves. The ban was encouraged, in part, by the makers of the more expensive CFLs. Which concept is best captured in this story?

Correct AnswerverifiedShow Answer

The free flow of ideas helps both the market and government to function better.

Correct AnswerverifiedShow Answer

When the costs of a good are paid for by nonconsumers, ______ of the good is produced.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Representative John Murphy has secured around $200 million of federal government money for a small airport near Juneburg, PA, that averages about 30 passengers a day. The costs of this government support:

Correct AnswerverifiedShow Answer

Presidents have an easier time changing ________ than ________ during an election year.

Correct AnswerverifiedShow Answer

Which of the following is most likely to happen just before an election?

Correct AnswerverifiedShow Answer

At one time, even coffee roasting was defined as a form of manufacturing.

Correct AnswerverifiedShow Answer

When government makes it possible to push the costs of a good onto other people we get too much of the good.

Correct AnswerverifiedShow Answer

Ignorance is

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Median Voter 2 -(Figure: Median Voter 2) What tax level could Jack Johnson support to ensure a victory in the election?

Correct AnswerverifiedShow Answer

The median voter is the voter such that half of the voters are on one side of the issue and the other half of the voters are on the other side of the issue.

Correct AnswerverifiedShow Answer

It is always irrational to be ignorant.

Correct AnswerverifiedShow Answer

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Correct AnswerverifiedShow Answer

When a policy is highly visible, appears often in the newspapers, and has a major effect on the lives of millions of Americans, very often:

Correct AnswerverifiedShow Answer

Special interest groups have an incentive to be:

Correct AnswerverifiedShow Answer

When citizens have NOT satisfied their basic needs for food, shelter and security, they still demand more cerebral goods.

Correct AnswerverifiedShow Answer

________ argues that ________.

Correct AnswerverifiedShow Answer

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Presidents have an easier time changing than during an election year.

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argues that .

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