b.
never gain from public policies that are not in accord with the interests of the general public.
c.
always gain from public policies that are not in accord with the interests of the general public.
d.
never lobby for public policies that are not in accord with the interests of the general public.
e.
always lobby for public policies that are not in accord with the interests of the general public.
73. Special interest groups are subsets of __________ that hold (usually) intense preferences for or against a particular
government service, activity, or policy.
a.
the general population
b.
bureaucrats
c.
elected officials
d.
candidates for political office
e.
all of the above
1
Easy
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74. According to public choice theorists, the behavior of people employed in the public sector is likely to differ from the
behavior of people employed in the private sector because
a.
the two sectors are likely to attract people of different psychological profiles.
b.
government employees are likely to exhibit more civic responsibility than private-sector employees.
c.
the same objective to maximize one’s net benefit will produce different behavior in different institutional
settings.
d.
all of the above
e.
a and b
1
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75. It has often been remarked that Democratic candidates are more liberal in the Democratic primaries and Republican
candidates are more conservative in the Republican primaries than either is in the general election. The explanation for
this is most probably that
a.
they are facing politically different opponents in the two elections.
b.
the median voter preferences are more to the left (right) in the primaries than in the general election.
c.
more people vote in the general election than in the primaries.
d.
candidates are not as likely to locate the position of the median voter in the (earlier) primaries as they are in
1
Moderate
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the (later) general election.
76. “In two hours the polls will close. I know I should probably vote, but it is raining, and besides, there is a basketball
game on TV tonight, so I’ll just stay in.” This person is exhibiting
a.
median voter preferences.
b.
rational ignorance.
c.
decision making based on cost-benefit considerations.
d.
logrolling.
Moderate
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Bloom’s: Application
77. Congressman A promises to vote for a bill that Congressmen B and C are sponsoring, and in return both B and C
promise to vote for a future bill that A is sponsoring. This practice is called
a.
b.
c.
d.
1
Easy
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78. Which of the following is a prediction of the median voter model for a two person political race?
a.
Candidates will try to present themselves as extremists.
b.
Candidates who are behind in the polls will try to move closer to the position of their opponents.
c.
Candidates will try to label their opponents as “too middle-of-the-road.”
d.
Candidates will try to be specific and clear about their own programs and the means of achieving them.
b
Moderate
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b
Moderate
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Bloom’s: Application
79. Simple majority voting sometimes leads to projects being undertaken whose costs are greater than the benefits. How is
this possible?
a.
It is not possible, unless the voting results are rigged.
b.
Because voters have no way to express the intensity of their preferences.
c.
Because many voters choose to be rationally ignorant.
d.
Because free riding is pervasive.
Exhibit 32-2
80. Refer to Exhibit 32-2-(a). Two candidates are competing for an electorate consisting of 9 voters labeled A-I shown
positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will
assume the ideological position(s)
a.
of voter A.
b.
halfway between that of voter G and that of voter A.
c.
of voter C.
d.
of voter B.
e.
of voter G and voter I, respectively.
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Bloom’s: Application
81. Refer to Exhibit 32-2-(b). Two candidates are competing for an electorate consisting of 3 voters labeled A, B, and C
shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates
will assume the ideological position(s)
a.
of voter B.
b.
of voters C and A, respectively.
c.
halfway between voter C and voter A.
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d.
halfway between voter B and voter A.
e.
halfway between voter C and voter B, for one candidate, and of voter A for the other.
82. Refer to Exhibit 32-2-(c). Two candidates are competing for an electorate consisting of 11 voters labeled A-K shown
positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will
assume the ideological position(s)
a.
of voters K and G, respectively.
b.
of voters H and J, respectively.
c.
of voters I and A, respectively.
d.
of voter E.
d
1
Challenging
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Exhibit 32-3
Individuals
Dollar benefits
to individuals
Tax levied
on individuals
Milton
$1,525
$1,000
Maria
$1,315
$1,000
Jaime
$505
$1,000
Maynard
$845
$1,000
Kenneth
$1,150
$1,000
83. Refer to Exhibit 32-3. The exhibit shows the breakdown of benefits and costs for a five-person community
considering whether to purchase a $5,000 statue of Adam Smith to put in the center of the public square. How will each of
the five persons (from Milton to Kenneth, in order) vote?
a.
against; against; against; for; for
b.
against; against; for; for; against
c.
against; for; for; for; for
d.
for; for; for; against; against
e.
for; for; against; against; for
1
Moderate
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Economics 24/7
1
Challenging
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84. Refer to Exhibit 32-3. The exhibit shows the breakdown of benefits and costs for a five-person community
considering whether to purchase a $5,000 statue of Adam Smith to put in the center of the public square. If simple
majority voting determines the outcome, the statue _______________ be purchased, and the total costs are
______________ the total benefits of the statue.
a.
will; greater than
b.
will; less than
c.
will not; greater than
d.
will not; less than
85. Public choice economists often explain low voter turnouts in terms of
a.
dissatisfaction of many voters with the limited choice of candidates.
b.
lack of civic responsibility of the electorate.
c.
net costs of voting that many voters perceive.
d.
rational ignorance of many voters of the actual date of the elections.
1
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Bloom’s: Comprehension
Situation 32-1
In the early 1980s, the U.S. automobile industry managed to influence the
government to negotiate a voluntary export restraint agreement with Japan
that was in effect from 1981 until 1985. The predictable result was an
average increase in the price of Japanese cars by about $1,000 and of U.S.
cars by about $370. Also, as a result of the import quotas, 26,000 new jobs
were “created” in the U.S. automobile industry.
86. Refer to Situation 32-l. This episode can be seen as an instance of
a.
rational ignorance.
b.
logrolling.
c.
special interest politics.
d.
a zero sum game.
Moderate
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b
Moderate
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Bloom’s: Application
Economics 24/7
New
87. Refer to Situation 32-l. At the time the total yearly salary (including all the benefits) of the average auto worker was
no more than $50,000 per year, and the cost per job saved was estimated at $160,000 per worker per year. We can
conclude that
a.
import quotas are a cost-efficient way of saving jobs.
b.
the U.S. auto industry, through its lobbying efforts, managed to promote the general public interest.
c.
the net social benefits of import quotas were positive.
d.
all of the above
e.
none of the above
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88. Refer to Situation 32-1. Which of the following arguments is least likely to have been used by the U.S. auto industry
to argue for import quotas?
a.
If the quantity of low-priced import cars is not restricted, foreigners will overtake the U.S. car market.
b.
A healthy auto industry is vital to our national security.
c.
If import quotas are in place, our profits will increase by about $300 per vehicle.
d.
Japan is protecting its market, and so should we; all we want is a level playing field.
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89. Public choice theorists insist that when a person goes from public to private employment, his or her motivations
__________ while the institutional arrangements shaping his or her actions __________.
a.
remain the same; change
b.
remain the same; also remain the same
c.
change; also change
d.
change; remain the same
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Bloom’s: Comprehension
90. There is evidence that __________ were the main lobbyists behind passage of the Factory Acts which put restrictions
on women and children working in early 19th century England.
a.
male workers
b.
female workers
Bloom’s: Application
c.
child-care advocates
d.
factory owners
91. Congressperson A: “If you approve that new water treatment plant in my district, I’ll vote to keep the Air Force base
open in your district.” Congressperson B: “It’s a deal.” This is an example of
a.
logrolling.
b.
lobbying.
c.
median voting.
d.
logtumbling.
1
Easy
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92. Public choice theorists say that the greater the number of potential voters in an election, the __________ the perceived
benefits of voting held by each voter, and so the __________ the likely percentage turnout of voters.
a.
greater; lower
b.
greater; higher
c.
smaller; lower
d.
smaller; higher
1
Moderate
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93. Public choice deals with
a.
negative and positive externalities.
b.
public-sector decision making.
c.
how people choose between several mutually exclusive options.
d.
bond, stock, and money markets.
e.
none of the above
b
1
Moderate
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1
Moderate
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Bloom’s: Application
94. According to public choice theorists, people in the market sector and people in the public sector have __________,
and (but) sometimes act differently because of different __________ arrangements in the two sectors.
a.
different motives; institutional
b.
the same motives; institutional
c.
different views of politics; equilibrium
d.
the same motives; equilibrium
e.
none of the above
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95. A public choice theorist believes that
a.
men and women in the market sector are fundamentally different people than men and women in the public
sector.
b.
government is likely to be composed of better people than the market sector.
c.
high fixed costs in government influence the behavior of government workers.
d.
government workers are generally lazy.
e.
none of the above
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96. In the median voter model, we assume that
a.
voters will vote for the friendlier of two candidates.
b.
voters will vote for the candidate who comes closer to matching their views.
c.
the candidate who occupies the far right has a better chance of winning the election than the candidate who
occupies the far left.
d.
there are three candidates running for the same office.
e.
b and c
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97. According to the median voter model, a candidate (in a two-person race) is more likely to label himself or herself a
“middle-of-the-roader” than a conservative or liberal because
a.
the terms “conservative” and “liberal” are offensive to many people in today’s world.
Bloom’s: Comprehension
b.
the terms “conservative” and “liberal” are considered terms used of people who are in the “wings” or
“extremes” of the political distribution, and a candidate can only win an election by being perceived as closer
to the center of the political distribution than his or her opponent.
c.
they receive better treatment by the press.
d.
it is customary and it has become a tradition in American politics.
e.
none of the above
98. One implication of the median voter model is that a candidate is likely to label himself __________ and his or her
opponent as __________.
a.
moderate; too far right or too far left (whichever makes more sense)
b.
a member of one of the political wings; moderate or mainstream
c.
as a member of the political right; moderate
d.
as a member of the political left; moderate
e.
none of the above
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99. One implication of the median voter model is that candidates running for political office take polls because
a.
everyone does it.
b.
they want to know if they should maintain their current positions or modify them.
c.
it is good public relations, since if the public learns that the candidate is taking polls, the public will feel that
the candidate cares what it thinks.
d.
taking polls is tax deductible.
e.
none of the above
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100. Why would a candidate for political office speak in general instead of specific terms?
a.
Because he or she believes voters want to hear generalities, not specifics.
b.
Because he or she believes voters are too busy to listen to specifics.
c.
Because he or she believes that specifics are too likely to label him or her as a member of an extreme-wing,
and politically this would be undesirable.
d.
Because it is cheaper to get the message out if it is worded in general instead of specific terms.
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101. Often, candidates running for political office will speak in general terms instead of specific terms because voters
agree more on __________ than __________.
a.
benefits; costs
b.
costs; benefits
c.
means; ends
d.
ends; means
e.
none of the above
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102. Two candidates, Smith and Jones, are running for the same political office. Last night they were in a debate. It is
generally accepted that Smith is perceived more to the left after the debate than before the debate. This is bad news for
Jones if before the debate Smith was perceived
a.
too far right.
b.
too far left.
c.
as being in the middle of the political spectrum.
d.
b or c
e.
none of the above
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Bloom’s: Application
103. Three persons, A, B, and C, will use a simple majority vote to determine whether some good will be purchased. Each
person’s “tax share” of the purchase price of the good will be $25. Person A receives $30 worth of benefits from the good,
person B receives $26 worth of benefits from the good, and person C receives $2 worth of benefits from the good. It
follows that __________ person(s) will vote for the good, __________ person(s) will vote against it, and that the outcome
is __________.
a.
one; two; inefficient
b.
two; one; efficient
c.
one; two; efficient
d.
two; one; inefficient
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104. Candidates in a two-person race express very similar positions a few weeks before the election. A voter complains
that there is not much difference between the two candidates. What this voter misunderstands or ignores is that
a.
each candidate has an incentive to be like the other.
b.
each candidate has an incentive to be different from the other.
c.
each candidate has an incentive to be perceived as in the “middle of the road,” and if both candidates correctly
act on this incentive they will end up sounding alike.
d.
this simply happens sometimes.
e.
none of the above
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105. The median voter model predicts that
a.
both candidates in a two-person race will definitely move toward the middle of the political spectrum as the
election approaches.
b.
the candidate (in a two-person race) closer to the middle of the political spectrum (closer to the median voter)
on election day will win the election.
c.
conservatives have a higher probability of winning elections than liberals.
d.
liberals have a higher probability of winning elections than conservatives.
e.
voters will often be rationally ignorant of important political issues.
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106. Simple majority rule can generate inefficient outcomes because
a.
it does not register the intensity of voters’ preferences.
b.
it cannot adjust for special interest lobbying efforts.
c.
it does not adjust for the costs of rational ignorance.
d.
people are often misinformed on what it is they are voting on.
e.
none of the above
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107. In a simple majority vote, the losses to the losers are greater than the gains to the winners. It follows that the
a.
outcome of the vote is efficient.
b.
outcome of the vote is inefficient.
c.
outcome of the vote will be nullified (most likely by the Courts).
d.
vote has generated net benefits.
e.
none of the above
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108. Candidate A says, “Health care is too expensive in the United States. We need to do something-and quickly-to
develop a better, more responsive, less expensive health care system.” Candidate B, who is running against candidate A in
a two-person race, says, “Health care is too expensive in the United States. We need to do something about it and quickly.
I suggest that we have the federal government develop a centralized system for delivering health care in this country.” If
you know nothing else about the two candidates, it follows that
a.
candidate A has taken polls and candidate B has not.
b.
candidate B has taken polls and candidate A has not.
c.
candidate B is smarter than candidate A.
d.
candidate B has a higher probability of winning the election than candidate A.
e.
candidate A has a higher probability of winning the election than candidate B.
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109. When it comes to voting in a presidential election, we would expect, ceteris paribus,
a.
a lower percentage of eligible voters will vote if the weather is bad and this makes it harder to get to the polls
on election day (than would have voted if the weather was good).
b.
a higher percentage of eligible voters will vote if the weather is bad on election day (than would have voted if
the weather was good).
c.
many people to vote who are rationally ignorant.
d.
a higher voter turnout in the North than in the South.
e.
a and c
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Bloom’s: Comprehension
110. A college professor berates his political science students for being uninformed on current political and government
issues. For example, most of them do not know who represents them in the U.S. House of Representatives. He tells his
students that they will never get very far in life by staying so uninformed and uninterested. The professor is probably
overlooking the fact that
a.
people are uninformed and uninterested in only some things-not all things.
b.
his students could be choosing rational ignorance.
c.
by not taking out time to find out certain things, his students have more time to study for his tests.
d.
a, b, and c
e.
none of the above
111. Ceteris paribus, economics predicts that voter turnout will be higher
a.
the smaller the number of eligible voters.
b.
the larger the number of eligible voters.
c.
the easier it is to get to the polls on election day.
d.
a and c
e.
b and c
1
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112. A person will become informed on a political issue if
a.
it is considered an important issue to society at large.
b.
he perceives the benefits of becoming informed as greater than the costs of becoming informed.
c.
it is regularly discussed on television news shows.
d.
it is regularly written about in the daily newspapers.
e.
none of the above
1
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113. Suppose Congress passes a law that states that the federal government will pay $100 to any American citizen who
can pass a (reasonably simple) current political events test. It follows that
a.
this raises the benefits of being rationally ignorant.
b.
this raises the benefits of becoming informed and therefore will lower the degree of rational ignorance in
society.
1
Moderate
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c.
this raises the costs of being rationally ignorant.
d.
b and c
e.
none of the above
114. A politician running for political office does not speak in general terms, does not try to move to the middle of the
political spectrum, and does not take polls, therefore it follows that
a.
the median voter model is wrong.
b.
rational ignorance does not exist.
c.
the free-rider problem does not exist.
d.
voter turnout is likely to rise.
e.
none of the above
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Bloom’s: Comprehension
115. Which of the following is false?
a.
Special interest legislation is necessarily bad legislation in the sense that it does not (because it cannot) ever
benefit the general public.
b.
A special interest group is a subset of the general population that holds usually intense preferences for or
against a particular government service, activity, or policy.
c.
Congressional districts can be thought of as special interest groups for certain purposes.
d.
Special interest groups are likely to argue for their specific policies or programs by claiming they serve the
best interests of the general public.
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Bloom’s: Comprehension
116. Logrolling consists of
a.
exchanging votes to gain support for legislation.
b.
spreading the costs of a piece of special interest legislation over many millions of people.
c.
attempts directed at slowing down the growth of rational ignorance.
d.
increasing taxes on some people and lowering taxes on other people.
e.
none of the above
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Bloom’s: Application
117. One U.S. Senator promises to vote for a measure that another U.S. Senator wants only if the favor is returned in kind.
This is an example of
a.
rational ignorance.
b.
median voter politics.
c.
logrolling.
d.
public interest talk.
e.
none of the above
1
Easy
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118. Which of the following statements is a public choice economist most likely to agree with?
a.
People who work for the federal government are naturally lazy, whereas people who work for private firms are
naturally hard working.
b.
Good government comes from good people, bad government comes from bad people.
c.
Change the institutional arrangements, and you will change behavior.
d.
Bad people naturally gravitate toward a career in politics.
e.
Good people naturally gravitate toward a career in politics.
1
Moderate
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Bloom’s: Application
119. Grown children fawning over an elderly parent in order to try to secure a larger inheritance is an example of
a.
rent seeking.
b.
logrolling.
c.
rational ignorance.
d.
public choice.
1
Moderate
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1
Easy
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Bloom’s: Comprehension
120. The answer is: “rational ignorance.” What is the question?
a.
Why do special interest groups lobby politicians?
b.
What causes a candidate in a two-person political race to take polls?
c.
What explains why voters often know very little about the candidates and the issues?
d.
What motivates the free rider?
121. In his article Straight Talk About Economic Literacy, economist _______________________ said, “Citizens can vote
even if they have no idea what they are doing. If enough voters fit that description, democratic governments are bound to
make foolish decisions.”
a.
Milton Friedman
b.
James Buchanan
c.
Bryan Caplan
d.
John Maynard Keynes
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Bloom’s: Knowledge
Economics 24/7
122. Rent seeking is the actions of
a.
individuals and groups who spend resources to influence public policy in the hope of redistributing income to
themselves from others.
b.
a subset of the population that hold intense preferences for a particular government service.
c.
some citizens who choose not to acquire information because the costs of acquiring the information are greater
than the benefits.
d.
politicians who exchange votes to gain support for their own legislation.
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Bloom’s: Comprehension
Exhibit 32-4
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Bloom’s: Comprehension
123. Refer to Exhibit 32-4. At the market equilibrium price of the good, consumers’ surplus is the area
a.
D + E
b.
A + B + C + D + E
c.
A + B + C
d.
C + E
e.
none of the above
124. Refer to Exhibit 32-4. At the market equilibrium price of the good, producers’ surplus is the area
a.
D + E
b.
A + B + C + D + E
c.
A + B + C
d.
C + E
e.
none of the above
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
125. Refer to Exhibit 32-4. If producers of this good engage in rent seeking which results in the government imposing a
price floor of P2, then consumers’ surplus ends up being area
a.
D + E
b.
A + B + C + D + E
c.
A + B + C
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
d.
C + E
e.
A
126. Refer to Exhibit 32-4. Suppose that producers of this good engage in rent seeking which results in the government
imposing a price floor of P2. The loss of consumers’ surplus that occurs due to the price floor is
a.
B + C
b.
A + B + C + D + E
c.
A + B + C
d.
C + E
e.
A
1
Moderate
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
127. Refer to Exhibit 32-4. Suppose that producers of this good engage in rent seeking which results in the government
imposing a price floor of P2. The gain in producers’ surplus that occurs due to the price floor is
a.
B + C
b.
A + B + C + D + E
c.
A + B + C
d.
C + E
e.
B
1
Moderate
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
128. Constitutional economists
a.
assert that within a given set of institutions, constraints, laws and rules, outcomes might be the same no matter
who is elected to office.
b.
study the type of constraints that individuals might seek to place upon themselves in order to achieve some
objective that doesn’t seem achievable in a non-constrainable environment.
c.
assert that better outcomes arise from changing the political party in power at any given point in time than
from changing institutions and constraints.
d.
b and c
e.
a and b
1
Moderate
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
129. Suppose that a federal election is coming soon and the government has been running persistent large budget
deficits. Constitutional economists would most likely urge ___________________ in order to eliminate future budget
deficits.
a.
voters to vote for liberal candidates
b.
voters to vote for conservative candidates
c.
Congress to pass a law constraining them to spend no more than what they are receiving in tax revenues
d.
Congress to remove all constraints on spending and taxes.
1
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Comprehension
New
Essay
130. Why do many prospective voters choose to watch sports on television rather than watching the news or political
roundtables? In your answer, be sure to mention the role played by rational ignorance.
1
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Application
131. What is the median voter model? Describe four different ways in which this theory is predicted to impact the
behavior of political candidates.
Challenging
1
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: The role of government
Bloom’s: Comprehension
New