Chapter 18: Public Economy

In 2009, total federal and state government spending was about $5.1 trillion and the cost of choosing politicians to determine how this money would be spent amounted to roughly _____________ of government spending. A. 1/10 of 1% B. 1/10 of 2% C. 1/25 of 1% D. 1/25 0f 2%

A

In presidential elections over the last few decades, about ____________ of voting-age citizens actually turned out to cast their votes. A. 55-65% B. 45-50% C. 30-45% D. 70-75%

A

In some instances where voters have more than two choices in a democratic election, the principle that the __________________ will decide the outcome may no longer make logical sense. A. majority of voters B. under-educated voters C. economically challenged D. eligible voters

A

In the U.S. political arena, ______________________ may tend to emphasize the virtues of markets and the limitations of government, while _____________ may tend to emphasize the shortcomings of markets and the need for government programs. A. conservatives; liberals B. politicians; economists C. economists; politicians D. liberals; conservatives

A

Political institutions play a role in allocating the ____________________, and economists have played an active role along with other social scientists in analyzing ________________________________________. A. scarce resources of society; how such political institutions work B. single political district spending; the impossibility of the majority deciding what it prefers C. resources to pork barrel projects; the impossibility of deciding on spending limits D. funding to 51 tuition-free colleges and universities; disadvantages of price controls

A

The government is imposing an industrial pollution tax in an attempt to reduce carbon emissions. The cost of the tax to five major companies in the oil refining industry will be $50 million annually. In terms of reduced emissions, the annual benefits of the tax are valued at $10 per person. There are 125 million people directly affected by emissions from oil refineries owned by these companies. The total annual cost of this tax is ___________ while the total annual benefit to society is ___________. A. $250 million; $1.25 trillion B. $500 million; 1.5 trillion C. $250 million; $1.5 trillion D. $500 million; $1.25 trillion

A

The political systems in most Latin American nations differ from the political system in the United States because most Latin American nations A. have laws that require voting. B. have laws requiring voters to cast informed votes. C. are not recognized as democracies ruled by electoral majorities. D. are ruled by dictatorships.

A

The theory of __________________ holds that people won't bother incurring the costs of becoming informed and voting, because they know that their vote ___________________________________________. A. rational ignorance; won't be decisive in the election B. imperfect competition; has little impact on election outcomes C. inequality of incomes; won't be decisive in the election D. democracy by majority rule; won't impact election outcomes

A

Why are politicians more likely to focus their political actions on individuals with higher incomes and higher levels of education? A. research shows this group has greater informed voter participation B. research shows this group has a higher percentage of conservatives C. research shows this group has a higher percentage of liberals D. research shows members of this group have employment concerns

A

A problem may arise when politicians are elected by the votes of 60% or less of the population, because these politicians may not enact A. legislation that is focused on numerically small special interest groups. B. economic policy in the best interests of 100% of the population. C. public policies that fail to benefit social surplus. D. pork-barrel legislation using logrolling.

B

Legislators who focus on local spending projects for their own district typically show a lack of sufficient concern for A. meeting the demands of special interest groups. B. spending in the interest of the nation as a whole. C. law and non-market based economics. D. the prevalence of voting cycles.

B

Pork-barrel spending can be thought of as another case where democracy is challenged by _______________ and __________________. A. specials interest groups; disconnected voters B. concentrated benefits; widely dispersed costs C. conventional wisdom; lawyers and judges D. higher income earners; low-educated individuals

B

Research on voting behavior in the U.S. has shown that, on average, people who are more __________________ tend to _______________________. A. involved with a political party; vote more frequently B. connected to society; vote more frequently C. conservative; vote less frequently D. liberal; vote less frequently

B

Since the 1980s, national elections in Germany, Spain and France have all recorded ______________ than was recorded for presidential elections in the United States. A. lower voter participation B. higher voter participation C. a 50% higher number of votes cast D. a 50% lower number of votes cast

B

The problem of special interests in politics can be related to an economic policy problem called ________________________. A. pork-barrel spending B. regulatory capture C. logrolling D. imperfect competition

B

When ___________________ occurs, the result will be determined by the order in which choices are presented and voted on, not by_____________, because every choice is both preferred to some alternative and also not preferred to another alternative. A. vote splitting; special interests B. a voting cycle; majority rule C. vote splitting; a runoff round D. a voting cycle; a reduction in candidates

B

Which of the following characteristics differentiates the private economy from government? A. public policy with appropriate incentives B. self-correcting mechanism C. spending programs and unwanted results D. moderate future behaviour

B

Which of the following is a reason the Supreme Court was asked to rule on various provisions and interpretations of the Bipartisan Campaign Reform Act of 2002? A. legalized political advertising for the year leading up to an election B. conflicts with the free speech provisions of the U.S. Constitution C. allowed individuals to make unlimited political donations D. allowed foreign corporations to make unlimited political donations

B

________________ occurs when a group of legislators all agree to vote for a package of otherwise unrelated laws that they individually favor. A. Pork-barrel spending B. Logrolling C. Competitive spending D. Politically conservative spending

B

_______________________ are numerically small, but well organized groups that are able to exert a disproportionate effect on political outcomes. A. Bipartisan reform organizations B. Special interest groups C. Social scientists organizations D. Bipartisan campaign reformers

B

At the time the United States was formed, mandatory voting was required in each of the following states with one exception. Which one is it? A. Virginia B. Maryland C. Alabama D. Delaware C

C

Australian law may require people to vote, but mandatory voting laws are unlikely to mean that each vote cast in an election __________________________________. A. will matter less than it does in a free society B. is worth the loss of freedom not to vote C. will be an informed or a thoughtful vote D. was cast by voters who don't care who wins

C

Economists readily admit that in settings that involve a monopoly or negative externalities, a potential role exists for _______________________. A. scare resources B. economically wise programs C. government intervention D. economically wise projects

C

In ____________________, when there is no president race, the voter turnout is typically ___________________________. A. Senate elections; more than half of eligible voters B. Congressional elections; more than half of eligible voters C. Congressional elections; less than half of the eligible voters D. Senate elections; less than half of eligible voters

C

In the U.S., why is figuring out a way of strengthening people's feeling of connectedness to society still an issue of importance? A. it will make it easier for people to register to vote B. keeping the polls open longer will create more jobs C. other proposals offered have failed to substantially increase voter turnout D. those who vote tend to be more supportive of quality public education

C

In the United States, which of the following would be most likely to participate in an election by informing themselves and casting their vote? A. single people B. newcomers C. the employed D. the socially isolated

C

The government wants to enact tax legislation aimed at reducing increasing discharge levels of toxins into municipal waste water systems. The annual cost of the tax to the 100 worst industrial polluters will be $5 million each. The annual benefits of the tax, in terms of reduced toxin levels in water systems, are valued at $25 per person. There are 300 million people directly affected by the 100 worst industrial polluters. The total cost of this tax is ___________ while the total benefit to society is ___________. A. $125 million; $1.5 trillion B. $125 million; $7.5 trillion C. $500 million; $7.5 trillion D. $500 million; $1.5 trillion

C

U.S. presidential elections over the last few decades have typically involved _____________ of voting-age citizens actually participating by ___________________ to vote. A. 75-80%; joining a political party B. 65-75%; registering C. 55-65%; exercising their right D. 40-55%; getting out

C

U.S. voting statistics show that elderly citizens donate both money and time to political campaigns. In the 2012 presidential election, ___________ of those over age 65 voted, while just ___________ of the remainder of the voting age population cast a ballot. A. 75%; 68% B. 44%; 20% C. 70%; 49% D. 50%; 30%

C

Which of the following is an oversimplified term that is sometimes used to describe the meaning of democracy? A. voting cycles B. majority opinion C. majority rule D. majority vote

C

_________________ are more likely to arise from a group that is easily identifiable, rather than from a group where some of those who suffered may not even recognize that _____________________________. A. Connected peoples; specific tax breaks exist for them B. Socially isolated people; government intervention is needed C. Special interests; they are bearing the costs D. Beneficiaries; rent controls are in effect

C

___________________ is a particular type of spending that mainly benefits a single political district. A. Logrolling B. Special interest spending C. Pork-barrel spending D. An appropriate spending program

C

A practical approach to microeconomic policy will need to take a realistic view of the specific strengths and weaknesses of markets and ___________________________________. A. rational ignorance that encourages a preference for uninformed voting B. the difficulties that arise when electors have three or more ballet choices. C. lobbying efforts that encourage pork-barrel spending D. the specific strengths and weaknesses of government

D

In Canada, voters typically choose between three or more candidates in an election, which can lead to situations where A. actors in the political system are presumed to follow their own self-interest. B. there will be a disproportionately large impact on conservative politicians. C. there will be a disproportionately large impact on liberal politicians. D. it becomes impossible for the majority to decide who it prefers.

D

In a 1948 novel titled "Walden II", one of the characters states: "The chance that one man's vote will decide the issue in a national election...is less than the chance that he will be killed on his way to the polls." This statement addresses A. why laws against pork-barrelling and logrolling cannot be legislated. B. why the United States spends too much money on elections. C. why the margin of victory in elections is measured in hundreds, thousands, and millions of votes. D. why a utility-maximizing person may rationally decide not to vote or become informed about elections.

D

The $5.8 billion spent on political campaigns in the United States in 2012 represents roughly _____________ of the nation's overall economy. A. 1/10 of 1% B. 1/15 of 1% C. 1/20 of 1% D. 1/25 of 1%

D

The absence of which of the following best explains why government agencies are slower to correct mistakes than private firms. A. imperfect information B. discrimination in wealth distribution C. monopoly over the economy D. competition or a threat of new entry

D

The government has decided to impose a pollution tax on coal burning power plants in an attempt to reduce harmful emissions. The new tax will cost the 20 largest industrial carbon emitters $6 million annually. In terms of reduced emissions, the annual tax benefits are valued at $20 per person. 100 million people are directly affected by emissions from these plants. The total annual cost of this tax is ___________, while the total annual benefit to society is ____________. A. $60 million, $2 trillion B. $60 million, $1 trillion C. $120 million, $1 trillion D. $120 million, $2 trillion

D

What American economist wrote "An Economic Theory of Democracy" in which it is stated: "It seems probable that for a great many citizens in a democracy, rational behavior excludes any investment whatever in political information per se." A. B.F. Skinner B. Adam Smith C. F. Scott Fitzgerald D. Anthony Downs

D

When the U.S. Congress begins to draft laws and regulations that attempt to reduce the harmful effects of environmental pollution, industry lobbyists will A. study every word and comma. B. suggest alternate wording. C. often contribute to campaigns of legislators on key committees. D. do all of the above in order to influence legislation in their favour.

D

Which of the following is not one of the proposals that have been offered to encourage greater voter turnout? A. making it easier to register to vote B. keeping the polls open for more hours C. moving election day to a weekend D. tax incentives for active voters

D

Who of the following is credited with having once written: "No one pretends that democracy is perfect or all-wise"? A. Abraham Lincoln B. Adam Smith C. F. Scott Fitzgerald D. Sir Winston Churchill

D