Question 1

Which of the following was the main cause of the 1974 famine in Bangladesh?

Accepted Answer

A)  floods 
B)  lack of food 
C)  lack of economic and political freedoms 
D)  high rice prices 
A)  floods 
B)  lack of food 
C)  lack of economic and political freedoms 
D)  high rice prices

Question 2

A simple logic underlying the apparent chaos of seemingly unique and momentous elections is that:

Accepted Answer

A)  voters are so unresponsive to economic conditions that the winner of a presidential election cannot be predicted with any accuracy. 
B)  voters are so responsive to economic conditions that the winner of a presidential election can be predicted with considerable accuracy. 
C)  pundits scrutinize the daily chronicle of events to divine how the candidates advance and retreat in public opinion. 
D)  personalities and leadership of the candidates loom large and are reckoned to swing voters one way or another. 
A)  voters are so unresponsive to economic conditions that the winner of a presidential election cannot be predicted with any accuracy. 
B)  voters are so responsive to economic conditions that the winner of a presidential election can be predicted with considerable accuracy. 
C)  pundits scrutinize the daily chronicle of events to divine how the candidates advance and retreat in public opinion. 
D)  personalities and leadership of the candidates loom large and are reckoned to swing voters one way or another.

Question 3

Which of the following programs are the two largest sources of the U.S. government budget?

Accepted Answer

A)  welfare and foreign aid 
B)  defense and interest on the federal debt 
C)  health care and Social Security 
D)  defense and Social Security 
A)  welfare and foreign aid 
B)  defense and interest on the federal debt 
C)  health care and Social Security 
D)  defense and Social Security

Question 4

The median voter theorem holds that the:

Accepted Answer

A)  policy that caters to the median voter will beat any other policy in a majority rule election. 
B)  policy that adjusts the left of the median voter will beat any policy further to the right. 
C)  policy that adjusts to the right of the median voter will beat any policy further to the left. 
D)  median voter's preferences cannot be met. 
A)  policy that caters to the median voter will beat any other policy in a majority rule election. 
B)  policy that adjusts the left of the median voter will beat any policy further to the right. 
C)  policy that adjusts to the right of the median voter will beat any policy further to the left. 
D)  median voter's preferences cannot be met.

Question 5

Suppose that a special interest group makes up 2 percent of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

Accepted Answer

A)  Yes, the benefits of $700 outweigh the costs of $42. 
B)  No, the benefits of $600 are less than the costs of $2,000. 
C)  They'll be indifferent since the benefits equal the costs. 
D)  No, the benefits of $600 are less than the costs of $100,000. 
A)  Yes, the benefits of $700 outweigh the costs of $42. 
B)  No, the benefits of $600 are less than the costs of $2,000. 
C)  They'll be indifferent since the benefits equal the costs. 
D)  No, the benefits of $600 are less than the costs of $100,000.

Question 6

What does the evidence from 60 years of U.S. data show regarding the growth rate in personal income in each quarter of a president's term in office?

Accepted Answer

A)  The growth rate holds steady at approximately 1.8 percent. 
B)  The growth rate increases in the quarters just after election. 
C)  The growth rate decreases in the quarters just before election. 
D)  The growth rate increases in the quarters just before election. 
A)  The growth rate holds steady at approximately 1.8 percent. 
B)  The growth rate increases in the quarters just after election. 
C)  The growth rate decreases in the quarters just before election. 
D)  The growth rate increases in the quarters just before election.

Question 7

Which of the following statements is FALSE?

Accepted Answer

A)  Economists support free and competitive markets. 
B)  Economists are skeptical about price controls and tariffs. 
C)  Economists favor command and control regulation. 
D)  Economists oppose super-high inflation rates. 
A)  Economists support free and competitive markets. 
B)  Economists are skeptical about price controls and tariffs. 
C)  Economists favor command and control regulation. 
D)  Economists oppose super-high inflation rates.

Question 8

During election years personal disposable income ________ more than at other times, while inflation tends to ________.

Accepted Answer

A)  falls; rise. 
B)  grows; rise. 
C)  grows; fall. 
D)  falls; fall 
A)  falls; rise. 
B)  grows; rise. 
C)  grows; fall. 
D)  falls; fall

Question 9

The diffusion of costs and concentration of benefits: I. leads to rational ignorance on the part of voters. II. is the formula to which the sugar quota owes its existence. III. is a formula for reelection to political office.

Accepted Answer

A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III 
A)  I only 
B)  I and II only 
C)  II and III only 
D)  I, II, and III

Question 10

Suppose that a special interest group comprises 1 percent of society, and a proposed law would give them $10,000 of benefits but cost society $900,000. The special interest group will oppose this policy because the costs exceed the benefits.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT the reason why ignorance about political matters is important?

Accepted Answer

A)  It is difficult for voters to make informed choices if they are not well informed. 
B)  Voters who are rationally ignorant will often make decisions for irrational reasons. 
C)  Voters who are well informed would perceive politics as entertainment. 
D)  Rational ignorance matters because not everyone is rationally ignorant. 
A)  It is difficult for voters to make informed choices if they are not well informed. 
B)  Voters who are rationally ignorant will often make decisions for irrational reasons. 
C)  Voters who are well informed would perceive politics as entertainment. 
D)  Rational ignorance matters because not everyone is rationally ignorant.

Question 12

People who spend more time and effort investigating the advantages and disadvantages of different flat-screen televisions when they go to purchase one than they do investigating the strengths and weaknesses of presidential candidates are saying, in effect, that:

Accepted Answer

A)  they do not think it matters who is elected president. 
B)  they are irrational, because the choice of a president is obviously far more important than the choice of a TV. 
C)  a good TV is more important to their well-being than a good president. 
D)  they expect to use the information on the merits of alternative TVs to greater personal advantage than they could information on the merits of alternative presidential candidates. 
A)  they do not think it matters who is elected president. 
B)  they are irrational, because the choice of a president is obviously far more important than the choice of a TV. 
C)  a good TV is more important to their well-being than a good president. 
D)  they expect to use the information on the merits of alternative TVs to greater personal advantage than they could information on the merits of alternative presidential candidates.

Question 13

According to the median voter theorem, when do political outcomes change?

Accepted Answer

A)  when the consensus changes 
B)  as a result of a compromise 
C)  when the median voter changes his/her preferences 
D)  when there is new technology to account for proper voting 
A)  when the consensus changes 
B)  as a result of a compromise 
C)  when the median voter changes his/her preferences 
D)  when there is new technology to account for proper voting

Question 14

The government spends more on foreign aid than:

Accepted Answer

A)  health care. 
B)  welfare. 
C)  Social Security. 
D)  None of the answers is correct. 
A)  health care. 
B)  welfare. 
C)  Social Security. 
D)  None of the answers is correct.

Question 15

According to the median voter theorem, the politician with a platform closest to the ideals of the median voter will win an election.

Accepted Answer

A) True 
 B)False

Question 16

Rational ignorance in voting comes from:

Accepted Answer

A)  externalities that lead to an excess supply of information. 
B)  the limited incentive of the news media to cover political campaigns. 
C)  the expectation of individual voters that their vote will not be decisive. 
D)  the lack of a college education on the part of most voters in the United States. 
A)  externalities that lead to an excess supply of information. 
B)  the limited incentive of the news media to cover political campaigns. 
C)  the expectation of individual voters that their vote will not be decisive. 
D)  the lack of a college education on the part of most voters in the United States.

Question 17

The political power of farmers ________ as the share of farmers in the population decreased, because the benefits from farm subsidies became ________ concentrated.

Accepted Answer

A)  increased; less 
B)  increased; more 
C)  decreased; less 
D)  decreased; more 
A)  increased; less 
B)  increased; more 
C)  decreased; less 
D)  decreased; more

Question 18

One of the largest federal spending programs is foreign aid.

Accepted Answer

A) True 
 B)False

Question 19

The free flow of ideas helps both the market and government to function better.

Accepted Answer

A) True 
 B)False

Question 20

Reference: Ref 19-3 (Figure: Economic Freedom and Living Standards) Refer to the figure. Based on this chart, we can conclude that:

Accepted Answer

A)  greater economic freedom causes a higher standard of living. 
B)  there is a positive relationship between economic freedom and GNI per capita. 
C)  higher GNI per capita raises the level of democracy. 
D)  the wealthiest countries in the world are all democracies. 
A)  greater economic freedom causes a higher standard of living. 
B)  there is a positive relationship between economic freedom and GNI per capita. 
C)  higher GNI per capita raises the level of democracy. 
D)  the wealthiest countries in the world are all democracies.

Exam 19: Public Goods and the Tragedy of the Commons

Which of the following was the main cause of the 1974 famine in Bangladesh?

A simple logic underlying the apparent chaos of seemingly unique and momentous elections is that:

Which of the following programs are the two largest sources of the U.S. government budget?

The median voter theorem holds that the:

Suppose that a special interest group makes up 2 percent of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

What does the evidence from 60 years of U.S. data show regarding the growth rate in personal income in each quarter of a president's term in office?

Which of the following statements is FALSE?

During election years personal disposable income ________ more than at other times, while inflation tends to ________.

The diffusion of costs and concentration of benefits: I. leads to rational ignorance on the part of voters. II. is the formula to which the sugar quota owes its existence. III. is a formula for reelection to political office.

Suppose that a special interest group comprises 1 percent of society, and a proposed law would give them $10,000 of benefits but cost society $900,000. The special interest group will oppose this policy because the costs exceed the benefits.

Which of the following is NOT the reason why ignorance about political matters is important?

People who spend more time and effort investigating the advantages and disadvantages of different flat-screen televisions when they go to purchase one than they do investigating the strengths and weaknesses of presidential candidates are saying, in effect, that:

According to the median voter theorem, when do political outcomes change?

The government spends more on foreign aid than:

According to the median voter theorem, the politician with a platform closest to the ideals of the median voter will win an election.

Rational ignorance in voting comes from:

The political power of farmers ________ as the share of farmers in the population decreased, because the benefits from farm subsidies became ________ concentrated.

One of the largest federal spending programs is foreign aid.

The free flow of ideas helps both the market and government to function better.

Reference: Ref 19-3 (Figure: Economic Freedom and Living Standards) Refer to the figure. Based on this chart, we can conclude that:

The Big Ideas in Economics

The Power of Trade and Comparative Advantage

Business Fluctuations: Aggregate Demand and Supply

Equilibrium: How Supply and Demand Determine Prices

Elasticity and Its Applications

Taxes and Subsidies

The Price System: Signals, Speculation, and Prediction

Price Ceilings and Floors

International Trade

Externalities: When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination and Pricing Strategy

Oligopoly and Game Theory

Competing for Monopoly: the Economics of Network Goods

Monopolistic Competition and Advertising

Labor Markets

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Asymmetric Information: Moral Hazard and Adverse Selection

Consumer Choice

Gdp and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth, Capital Accumulation, and the Economics of Ideas: Catching up Vs the Cutting Edge

Saving, Investment, and the Financial System

Supply and Demand

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Transmission and Amplification Mechanisms

The Federal Reserve System and Open Market Operations

Monetary Policy

The Federal Budget: Taxes and Spending

Filters

During election years personal disposable income more than at other times, while inflation tends to .

The political power of farmers as the share of farmers in the population decreased, because the benefits from farm subsidies became concentrated.