Exam 6: The Economics of Political Action

Use the figure below to answer the following question(s). Figure 6-1 -Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. Programs that give subsidies to a small group of producers at general taxpayer expense would be considered

Logrolling refers to

Which of the following factors weakens the case for private-sector provision of goods and services relative to public-sector provision?

Which of the following is a distinguishing characteristic of a user charge?

The park in Hammerhead, Florida, built to honor the city's founding father, General Hammerhead, is starting to deteriorate. It would take about $5,000 to restore the General's statue, repair the benches, and repair the fountain, but the city budget is tight. Also, the deterioration is not that noticeable. Mayor Grouper suggests delaying the repair until after the election, three years away. City Councilwoman Halibut notes that by then the park will be dilapidated, and repairs will cost $25,000. From a public choice perspective, what is the likely outcome of this debate?

When governments become more heavily involved in taxing one group in order to provide benefits to other groups, which of the following will be encouraged?

The term logrolling describes

Use the figure below to answer the following question(s). Figure 6-2 -Figure 6-2 illustrates the four possibilities of the structure of production and consumption for a good or service. In which case is the incentive of producers and consumers to economize the strongest?

A politician may be considered an entrepreneur in the sense that

Public choice analysis

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

Public choice analysis indicates

When the government both provides a service and covers its costs through taxation,

Which of the following factors explains why managers of government agencies (the public sector) have little incentive to operate efficiently?

When resources are allocated politically, rent-seeking will

When voters pay taxes in proportion to the benefits they receive from government projects,

For activities in which the benefits are concentrated and the costs widespread, governments are likely to undertake

The methodology of public choice analysis

In which case is the political process most likely to result in the acceptance of efficient projects and rejection of inefficient projects?

Special-interest programs are highly attractive to vote-seeking politicians because