Exam 5: Public Goods, Public Choice, and Government Failure

Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $8, respectively, for the third unit of a public good. Also, assume that the marginal cost of the third unit is $17. We can conclude that

Refer to the table. In a choice between education and public safety,

Nonexcludability describes a condition where

What is regulatory capture?

Because majority voting fails to incorporate the strength of the preferences of individual voters, it

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of

Majority voting fails to incorporate the strength of the preferences of individual voters and therefore

In assessing the efficiency of government policy, economic analysis would focus on

Majority voting may produce economically inefficient outcomes because it

A public good

The problem of limited and bundled choices explains why many voters cannot fully express their political preferences.

One implication of the median-voter model, as applied to a vote regarding how much government involvement to have in the economy, is that most voters would find the resulting government involvement either too large or too small.

When the special-interest effect is the major reason for the passage of a government policy or project, then economic efficiency will always improve.

The principal-agent problem is a problem for the private sector but does not apply to political decision making.

Demand-side market failures refer to those situations when there is a shortage in the market because buyers want to buy more than what is available in the market.

Even in a democratic government, elected officials may end up pursuing policies that go against the preferences of the people due to the following reasons, except

When congressional representatives vote on an appropriations bill, they must vote yea or nay, taking the bad with the good. This statement best reflects the

Sometimes, public goods whose benefits are less than their costs still get produced because

Professional sports teams will sometimes seek public subsidies for stadium financing projects that produce large benefits for a relatively small number of fans and impose small costs on a relatively large number of people. Sometimes these efforts to secure public funding are successful even though the decision is not efficient. This is an example of

Which of the following would be the best example of regulatory capture?