quizzes 8.4

If voters lack an economic incentive to become informed about pending legislation, then their preferences become a constraint on legislators voting for rent-seeking legislation.

False

It is well-known that the use of landfills effectively destroys the value of land for subsequent use.

False

Recycling is not an economic problem because it involves running out of basic resources that our children might need.

False

Recycling is not an economic problem because there is only so much land that can be used for landfill, and that land is substantially damaged by the creation of garbage dumps.

False

The video indicated that there is a significant difference between recycling fluorescent lights and plastic bottles.

True

According to public choice theory, policymakers

are likely to pursue their own self-interest, even if their self-interest conflicts with the public interest.

Which of the following statements about rent seeking is false?

Because rent seeking redistributes society's resources, anyone engaging in such behavior is violating the law.

Sam Peltzman's paper, "Toward a More General Theory of Regulation," argued that regulators would reach an equilibrium when

Correct The marginal benefit to the regulator of providing special treatment to producers equals the marginal cost of angering consumers into voting to remove the regulator.

Which of the following is an example of rent seeking behavior?

Correct U.S. sugar firms convinced Congress to impose a quota on imports of sugar.

Economics shows that it is inefficient to recycle plastic bottles because they have little value.

False

What is regulatory capture?

It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest.

The economically efficient amount of recycling will occur if

Recyclers pay the full cost of picking up recycled products,

Megan McArdle argues that regulatory capture happens for all of the following reasons except

Regulators want the regulated industry to spend a lot of time and effort on compliance.

The U.S. government has imposed quotas on the importation of sugar that makes sugar prices higher because

Sugar farmers lobbied for regulation that would increase their profits by limiting competition.

To evaluate recycling, you must consider

The demand for recycled products, The incremental costs to society for recycling products, The value of the land used for landfills

The appropriate charge for trash disposal should be set by

The opportunity cost of using the landfill, The cost of the trucks and labor needed to haul trash away,

The opportunity cost of using land for a landfill is determined by:

The value of the land before the landfill was developed, minus the cost of the land after the landfill is full.

Recycling is an economic issue because the goods that are recycled, the land for landfills, and the trucks and labor needed for both recycling and trash disposal are all examples of scarce resources.

True

Which of the following is not an example of rent-seeking behavior?

engaging in aggressive advertising that slams a competitor's product

Financial contributions to the campaigns of members of Congress, state legislators, and other elected officials by firms that seek special interest legislation that make the firms better off are

examples of rent seeking.