Question 1

Ignorance is rational when the benefits of being informed are:

Accepted Answer

A)  greater than the costs of becoming informed. 
B)  less than the costs of becoming informed. 
C)  equal to the costs of becoming informed. 
D)  likely to be quite large but information is costless. 
A)  greater than the costs of becoming informed. 
B)  less than the costs of becoming informed. 
C)  equal to the costs of becoming informed. 
D)  likely to be quite large but information is costless.

Question 2

Economists say that voters are rationally ignorant about politics because:

Accepted Answer

A)  the procedure of learning politics is too cumbersome. 
B)  politics is too complicated. 
C)  the opportunity cost of studying politics is too high. 
D)  the incentives to be fully informed are low. 
A)  the procedure of learning politics is too cumbersome. 
B)  politics is too complicated. 
C)  the opportunity cost of studying politics is too high. 
D)  the incentives to be fully informed are low.

Question 3

Is saying that a voter is rationally ignorant the same thing as saying the voter is irrational?

Accepted Answer

No, rational ignorance and irrationality

Question 4

Presidents have an easier time changing ________ than ________ during an election year.

Accepted Answer

A)  GDP; taxes and transfer payments 
B)  the overall economy; GDP 
C)  taxes and transfer payments; GDP 
D)  GDP; overall economy 
A)  GDP; taxes and transfer payments 
B)  the overall economy; GDP 
C)  taxes and transfer payments; GDP 
D)  GDP; overall economy

Question 5

Nobel Prize-winning economist Amartya Sen indicated that hunger is caused by a lack of exchange entitlements. In other words, food may be plentiful but people starve because they are unable to access it. Can you explain how this is possible even if markets are well functioning?

Accepted Answer

A lack of economic power, especially if

Question 6

Voters are rationally ignorant because the incentives to being informed are low.

Accepted Answer

A) True 
 B)False

Question 7

Reference: Ref 19-1 (Figure: Kidney Trade Ban Policy Spectrum) Refer to figure. If A, B, and C are all candidates in the election, and an open market for kidney trading is the only issue being debated, based on the median voter theorem, which candidate will win the election?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  A, B, and C will each receive an equal number of votes. 
A)  A 
B)  B 
C)  C 
D)  A, B, and C will each receive an equal number of votes.

Question 8

The costs of many government projects (such as bridges, roads, and museums) create:

Accepted Answer

A)  external costs because taxpayers around the country pay for the construction. 
B)  internal costs because taxpayers around the country pay for the construction. 
C)  internal benefits because all taxpayers benefit from the construction. 
D)  external benefits because taxpayers around the country benefit from the construction. 
A)  external costs because taxpayers around the country pay for the construction. 
B)  internal costs because taxpayers around the country pay for the construction. 
C)  internal benefits because all taxpayers benefit from the construction. 
D)  external benefits because taxpayers around the country benefit from the construction.

Question 9

Why do studies show that food distribution is better in economies with higher political competition?

Accepted Answer

A)  Higher political competition always ensures better food production in farming areas. 
B)  Increased competition between political parties leads voters to educate themselves on the availability of such distribution systems. 
C)  The threat of failure to get reelected spurs government into providing better food distribution systems. 
D)  All of these explanations are correct. 
A)  Higher political competition always ensures better food production in farming areas. 
B)  Increased competition between political parties leads voters to educate themselves on the availability of such distribution systems. 
C)  The threat of failure to get reelected spurs government into providing better food distribution systems. 
D)  All of these explanations are correct.

Question 10

The key formula for political success behind the sugar quota is:

Accepted Answer

A)  diffused costs and concentrated benefits. 
B)  diffused benefits and concentrated costs. 
C)  diffused costs and benefits. 
D)  concentrated costs and benefits. 
A)  diffused costs and concentrated benefits. 
B)  diffused benefits and concentrated costs. 
C)  diffused costs and benefits. 
D)  concentrated costs and benefits.

Question 11

How do special interests affect tax policy in the United States?

Accepted Answer

Politicians add special interest provisi

Question 12

When government makes it possible to externalize the cost of a good:

Accepted Answer

A)  there will be an optimal quantity of the good. 
B)  there will be an insufficient quantity of the good. 
C)  there will be too much of the good. 
D)  the good will not be produced at all. 
A)  there will be an optimal quantity of the good. 
B)  there will be an insufficient quantity of the good. 
C)  there will be too much of the good. 
D)  the good will not be produced at all.

Question 13

How are democracy and wealth related?

Accepted Answer

A)  Once people's basic needs have been met, there is an increased demand for democracy and political participation. 
B)  Democracy is associated with institutions (free press, private property rights, lower levels of corruption) that are favorable towards growth and wealth accumulation. 
C)  Neither of these explanations is correct. 
D)  Both of these explanations are correct. 
A)  Once people's basic needs have been met, there is an increased demand for democracy and political participation. 
B)  Democracy is associated with institutions (free press, private property rights, lower levels of corruption) that are favorable towards growth and wealth accumulation. 
C)  Neither of these explanations is correct. 
D)  Both of these explanations are correct.

Exam 19: Public Goods and the Tragedy of the Commons

Ignorance is rational when the benefits of being informed are:

Economists say that voters are rationally ignorant about politics because:

Is saying that a voter is rationally ignorant the same thing as saying the voter is irrational?

Presidents have an easier time changing ________ than ________ during an election year.

Nobel Prize-winning economist Amartya Sen indicated that hunger is caused by a lack of exchange entitlements. In other words, food may be plentiful but people starve because they are unable to access it. Can you explain how this is possible even if markets are well functioning?

Voters are rationally ignorant because the incentives to being informed are low.

Reference: Ref 19-1 (Figure: Kidney Trade Ban Policy Spectrum) Refer to figure. If A, B, and C are all candidates in the election, and an open market for kidney trading is the only issue being debated, based on the median voter theorem, which candidate will win the election?

The costs of many government projects (such as bridges, roads, and museums) create:

Why do studies show that food distribution is better in economies with higher political competition?

The key formula for political success behind the sugar quota is:

How do special interests affect tax policy in the United States?

When government makes it possible to externalize the cost of a good:

How are democracy and wealth related?

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

Presidents have an easier time changing than during an election year.