Macro exam 1 chapter 6
Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?
Most of the benefits of pork-barrel projects within your district will accrue to your constituents, whereas most of the costs will be imposed on voters from other districts.
Economists use the term shortsightedness effect to describe which one of the following phenomena?
Politicians tend to support actions that have immediate and easily recognized current benefits.
When voters pay in proportion to the benefits received from an economic action of the government, if the government activity is productive,
all voters will gain
The Theory of public choice
analyzes the likelihood that various public sector alternatives will be instituted. assumes that economic incentives influence the choices of voters. applies the tools of economics to the collective decision-making process.
Public choice theory suggests that politicians will be most likely to favor redistribution of income from
disorganized individuals to well-organized special interest groups.
Giving local governments more power is less dangerous than giving the same power to the national government because
higher exit options exist at the local level--it is easier for people to move away from a bad local government.
Economic theory leads us to expect that the typical voter will be uninformed on many issues because
information is costly, and the individual voter casting a well-informed vote can expect negligible personal benefit.
When analyzing public sector decision making, economic theory assumes that voters, politicians, and government officials will
respond to changes in personal benefits and costs when making public sector choices.
Public choice theory indicates that competitive forces between candidates in elections provide a politician with a strong incentive to offer voters a bundle of political goods that she believes
will increase her chances of winning elections.
