Exam 16: Public Goods and Public Choice

Exhibit 16-4 Refer to Exhibit 16-4.Suppose the government announced it would give monopoly power to one firm in the industry through an exclusive license.According to the theory of rent seeking, what is the maximum amount that might be spent on rent seeking to get that license?

Legislators often have difficulty passing legislation with widespread benefits, but that imposes concentrated costs because those who bear the costs will __________ the legislation, while those who would reap the benefits will __________ the legislation.

Direct transfer programs

The market demand curve for a public good

Susie spends more of October thinking about her Halloween costume than she spends thinking about a proposed law that will be on the November ballot.Which of the following is true?

According to rent-seeking theory, which group is most likely to benefit from representative democracy?

Bureaus are

The total welfare cost of a monopoly that engages in rent-seeking activities

With special-interest legislation,

Which of the following would be considered tax evasion?

Sally, Kelly, and Debbie are roommates deciding on how many cats they want in the apartment.Sally prefers three cats to two cats to one cat, Kelly prefers two to one to three, and Debbie prefers one to two to three.If they decide by majority vote (one versus two, two versus three, and so on), how many cats will they get?

A lobbyist for the coal industry asks Congress to limit environmental constraints on coal-burning plants.This is an example of

A government that uses a bureau rather than a private firm to provide some good or service

In response to the threat of budget cuts, the Connecticut State Department of Recreation proposed shutting down many state parks and beaches.This is a good example of

Exhibit 16-3 Which area in Exhibit 16-3 reflects the loss of consumer surplus that results from the price floor?

Rational ignorance suggests that voters may not spend much time examining candidates before an election because

The Agricultural Marketing Act of 1937 was supposed to

Exhibit 16-2 Refer to Exhibit 16-2.How much more will consumers spend on wool because of the $6 price support?

Exhibit 16-2 Who would most likely lobby Congress for a price support on wool?

A study found that privately-operated juvenile correction facilities in Florida had __________ costs but experienced __________ rates of recidivism than state-operated juvenile corrections facilities.