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Which of the following represents why private production tends to be more efficient then government production? Politicians have a strong incentive to support projects that have immediate and easily recognized benefits and distant and unidentifiable costs, even if the total costs outweigh the total benefits. Politicians have a strong incentive to support programs where the benefits are highly concentrated on special interest groups and the costs are widely dispersed among voters, even if the total costs outweigh the benefits. Private companies face a profit motive that keeps them operating efficiently, government bureaucracies use taxpayer money and, therefore, do not face this profit motive. All of the above are reasons why private production tends to be more efficient then government production.

All of the above are reasons why private production tends to be more efficient then government production.

In which case is the political process most likely to result in the acceptance of efficient projects and rejection of inefficient projects? The benefits are highly concentrated, and costs are widespread among voters. The costs are highly concentrated, and the benefits are widespread among voters. Both the benefits and costs are widespread among voters. The benefits accrue primarily in the future, while the costs are more visible during the current period.

Both the benefits and costs are widespread among voters.

Which of the following is the most likely explanation for the imposition of a price floor in the market for corn? Policymakers have studied the effects of the price floor carefully and they recognize that the price floor will improve the efficiency of resource use. Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into enacting the price floor. Buyers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor. Sellers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.

Sellers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.

As methods of economic organization, the market and the public sector are similar in which of the following ways? Income and power are distributed equally in both sectors. In both sectors, economic activity is undertaken only when it satisfies the criterion for economic efficiency. In both sectors, economic exchange is completely voluntary. Someone must cover the cost associated with the provision of scarce goods in both sectors.

Someone must cover the cost associated with the provision of scarce goods in both sectors.

Which of the following is true? When the government undertakes an activity, we can be assured that all voters will gain. If a government activity is favored by most citizens, it must be productive. If most voters oppose a government activity, it must be counterproductive. When voters pay in proportion to benefits received, all voters will gain if the government activity is productive.

When voters pay in proportion to benefits received, all voters will gain if the government activity is productive.

Which of the following explains why pork-barrel spending is often approved, even when the spending is inefficient? Each representative has little incentive to oppose pork-barrel spending since the tax savings would accrue to taxpayers throughout the nation. General opposition to pork-barrel spending by a legislator would make it more difficult for the legislator to arrange for pork-barrel projects that provide concentrated benefits for his district. Logrolling increases the likelihood that pork-barrel projects will be approved. All of the above are correct.

all

Economic analysis suggests that bureaucrats and public-sector managers have a strong incentive to make sure that their budgets are as small as possible so more funds will be available for other government programs. expand their budgets to sizes beyond what would be considered economically efficient. ensure that their budgets are exactly the size that would be considered economically efficient. economize on their spending and return unspent funds to the general treasury.

expand their budgets to sizes beyond what would be considered economically efficient.

Pork-barrel legislation typically bundles the pet projects of several special interest groups. Such legislation is frequently enacted, even though the overall benefits to society are less than the overall costs to society. seldom benefits special interest groups. usually, if successful, helps the majority of taxpayers. seldom passes because social benefits are far smaller than social costs.

is frequently enacted, even though the overall benefits to society are less than the overall costs to society.

Public choice analysis assumes individuals in the public sector seek to serve the public interest rather than their own personal interests. is the study of the decision making of individual actors (such as voters, politicians, and bureaucrats) in the public sector. suggests that individual voters have a greater incentive to become informed when making choices among political candidates than when making choices about the products they consume. finds that the individuals managing government agencies generally have a much stronger incentive to be efficient than do individuals managing private businesses.

is the study of the decision making of individual actors (such as voters, politicians, and bureaucrats) in the public sector.

The shortsightedness effect suggests that politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future. politicians have a strong incentive to support projects that yield benefits in the distant future, especially when the costs of the project must be paid for in the current period. voters will tend to weigh future costs and benefits more heavily than current costs and benefits. legislators will be unwilling to trade votes on issues, especially when those issues benefit only special interest groups.

politicians have a strong incentive to support projects that yield immediate and easily recognized benefits, especially when the costs of the projects are difficult to identify and are observable only in the distant future.

When analyzing public sector decision making, economic theory assumes voters, politicians, and government officials will respond to changes in personal benefits and costs when making public sector choices. always pursue the public interest even when it conflicts with their private interests. generally ignore the personal costs and benefits associated with their choices. make decisions that seek to maximize the amount of benefits created for society as a whole.

respond to changes in personal benefits and costs when making public sector choices.

A politician may be considered an entrepreneur in the sense that he is always open to bribery. identical personal characteristics are necessary for success in politics and in business. the successful politician discovers and offers voters political goods when voter demand is strong for him. like the businessman, the politician selfishly attempts to gain at the expense of his customers.

the successful politician discovers and offers voters political goods when voter demand is strong for him.

Government action will often result in the counterproductive use of resources because there is often a conflict between winning political elections and adoption of only productive programs. many politicians are not interested in how their legislative votes will influence their chances of winning future elections. politicians are often unwilling to listen to interest groups that have specialized knowledge. voter participation is low; if more people voted, the political process would be more efficient.

there is often a conflict between winning political elections and adoption of only productive programs.

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is its ability to use coercive force against adults to modify their behavior or force them to pay for a good or service. direct resources in a manner that serves the public interest rather than the private interest of individuals. produce goods and services that people value. escape the constraints imposed by scarcity.

use coercive force against adults to modify their behavior or force them to pay for a good or service.

In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources? when the benefits are concentrated and the costs are concentrated when the benefits are concentrated and the costs widespread when the benefits are widespread and the costs are concentrated when the benefits are widespread and the costs are widespread

when the benefits are concentrated and the costs widespread