Question 1

According to ________ theory, governments make choices that result in an ________ provision of public goods.This outcome occurs in ________.

Accepted Answer

A) public choice; efficient; political markets in which voters are rationally ignorant 
B) social interest; efficient; a perfect political system in which voters are fully informed about the effects of policies 
C) social interest; efficient; political markets in which voters are rationally ignorant 
D) public choice; inefficient; a perfect political system in which voters are full informed about the effects of policies 
E) social interest; inefficient; political markets in which voters are rationally ignorant 
A) public choice; efficient; political markets in which voters are rationally ignorant 
B) social interest; efficient; a perfect political system in which voters are fully informed about the effects of policies 
C) social interest; efficient; political markets in which voters are rationally ignorant 
D) public choice; inefficient; a perfect political system in which voters are full informed about the effects of policies 
E) social interest; inefficient; political markets in which voters are rationally ignorant

Question 2

Use the figure below to answer the following questions.
   
Figure 17.2.1
-Refer to Figure 17.2.1.Curve MBA is Andrew's marginal benefit curve for a private good and curve MBB is Betty's marginal benefit curve for the same private good.If Andrew and Betty are the only two consumers in the economy, which point would be on the economy's marginal social benefit curve?

Accepted Answer

A) price of $20, quantity of 3 units 
B) price of $20, quantity of 4 units 
C) price of $10, quantity of 4 units 
D) price of $30, quantity of 0 units 
E) price of $60, quantity of 1 units 
A) price of $20, quantity of 3 units 
B) price of $20, quantity of 4 units 
C) price of $10, quantity of 4 units 
D) price of $30, quantity of 0 units 
E) price of $60, quantity of 1 units

Question 3

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Accepted Answer

A) cost curves horizontally. 
B) cost curves vertically. 
C) benefit curves horizontally. 
D) benefit curves vertically. 
E) benefit curves diagonally. 
A) cost curves horizontally. 
B) cost curves vertically. 
C) benefit curves horizontally. 
D) benefit curves vertically. 
E) benefit curves diagonally.

Question 4

Rational ignorance suggests that

Accepted Answer

A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians. 
A) all voters are ignorant. 
B) all voters will be ignorant on issues that are not of special interest to them. 
C) all voters will pursue information about each issue before voting. 
D) low voter turnout is due to a lack of understanding of the importance of the political platforms. 
E) it is easier to aim at the median voter because it is a less costly strategy for the politicians.

Question 5

To attract a majority of voters, a political party will

Accepted Answer

A) aim its message at the most enthusiastic groups. 
B) aim its message at a small but loyal following. 
C) present a political package aimed at making the wealthier voters better off. 
D) present a political package aimed at making a majority of voters better off. 
E) respond strongest to the most vigorous lobbyists. 
A) aim its message at the most enthusiastic groups. 
B) aim its message at a small but loyal following. 
C) present a political package aimed at making the wealthier voters better off. 
D) present a political package aimed at making a majority of voters better off. 
E) respond strongest to the most vigorous lobbyists.

Question 6

If all voters are well informed about national defence, the quantity of national defence provided by the government will be

Accepted Answer

A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence. 
A) greater than the efficient quantity. 
B) less than the efficient quantity. 
C) the least costly quantity. 
D) the efficient quantity. 
E) the quantity that maximizes the budget of the Department of National Defence.

Question 7

Sharing downloaded music

Accepted Answer

A) has a free-rider problem that cannot be eliminated because once music is downloaded, it is nonexcludable. 
B) has a free-rider problem that can be eliminated by charging people to download music. 
C) is a private good. 
D) does not have a free-rider problem. 
E) is a common resource. 
A) has a free-rider problem that cannot be eliminated because once music is downloaded, it is nonexcludable. 
B) has a free-rider problem that can be eliminated by charging people to download music. 
C) is a private good. 
D) does not have a free-rider problem. 
E) is a common resource.

Question 8

Minimum differentiation among the political parties suggests that

Accepted Answer

A) the parties will have few ideas in common on their platforms. 
B) the parties will offer few ideas on minimizing the size and scope of government. 
C) the platforms of the parties will tend to become similar as they try to appeal to a majority of voters. 
D) the platforms of the parties will tend to become dissimilar as they try to appeal to a loyal majority of voters. 
E) the platforms of the parties will tend to have few, if any, new ideas. 
A) the parties will have few ideas in common on their platforms. 
B) the parties will offer few ideas on minimizing the size and scope of government. 
C) the platforms of the parties will tend to become similar as they try to appeal to a majority of voters. 
D) the platforms of the parties will tend to become dissimilar as they try to appeal to a loyal majority of voters. 
E) the platforms of the parties will tend to have few, if any, new ideas.

Question 9

The idea that the platforms of the political parties will tend to become similar over time is

Accepted Answer

A) not a reflection of reality. 
B) true in theory but not true in actuality. 
C) called the principle of minimum differentiation. 
D) called the principle of minimal political confrontation. 
E) the result of intense lobbying pressure. 
A) not a reflection of reality. 
B) true in theory but not true in actuality. 
C) called the principle of minimum differentiation. 
D) called the principle of minimal political confrontation. 
E) the result of intense lobbying pressure.

Question 10

Rational ignorance

Accepted Answer

A) results when the cost of acquiring information exceeds the benefit of acquiring the information. 
B) allows special interest groups to exert political influence. 
C) combined with special-interest groups can yield inefficient provision of public goods. 
D) results in all of the above. 
E) results in none of the above. 
A) results when the cost of acquiring information exceeds the benefit of acquiring the information. 
B) allows special interest groups to exert political influence. 
C) combined with special-interest groups can yield inefficient provision of public goods. 
D) results in all of the above. 
E) results in none of the above.

Question 11

Use the information below to answer the following question.
Fact 17.2.1 Should Childhood Vaccines Be Mandatory?
While Canadian vaccination rates are high, the outbreaks of measles in five provinces during 2014 show that not everyone is getting them. There is no national policy making vaccinations mandatory, although Ontario, New Brunswick and Manitoba require public school students to show their immunization records to attend school.
Source: CBC Radio, April 15, 2014
-Refer to Fact 17.2.1.Someone who doesn't get vaccinated against measles is a "free rider" because if everyone in a neighbourhood except one person gets vaccinated, then the unvaccinated person

Accepted Answer

A) defeats the principle of minimum differentiation. 
B) benefits from the neighbours' vaccinations. 
C) increases the risk of his neighbours getting measles. 
D) changes the measles vaccination into a natural monopoly good. 
E) changes the measles vaccination into a common resource. 
A) defeats the principle of minimum differentiation. 
B) benefits from the neighbours' vaccinations. 
C) increases the risk of his neighbours getting measles. 
D) changes the measles vaccination into a natural monopoly good. 
E) changes the measles vaccination into a common resource.

Question 12

Use the figure below to answer the following questions.
   
Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost cure, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. To achieve an efficient quantity, the price of an ITQ is set at

Accepted Answer

A) $7.50 per litre of milk. 
B) $2.00 per litre of milk. 
C) $6.00 per litre of milk. 
D) $1.50 per litre of milk. 
E) $4.50 per litre of milk. 
A) $7.50 per litre of milk. 
B) $2.00 per litre of milk. 
C) $6.00 per litre of milk. 
D) $1.50 per litre of milk. 
E) $4.50 per litre of milk.

Question 13

Use the figure below to answer the following questions.
   
Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

Accepted Answer

A) 0 goats. 
B) 40 goats. 
C) 50 goats. 
D) 55 goats. 
E) 35 goats. 
A) 0 goats. 
B) 40 goats. 
C) 50 goats. 
D) 55 goats. 
E) 35 goats.

Question 14

The efficient scale of provision of a public good occurs where

Accepted Answer

A) total benefit is at a maximum. 
B) total benefit is at a minimum. 
C) marginal social benefit is at a maximum. 
D) marginal social benefit minus marginal social cost equals zero. 
E) marginal social cost is at a minimum. 
A) total benefit is at a maximum. 
B) total benefit is at a minimum. 
C) marginal social benefit is at a maximum. 
D) marginal social benefit minus marginal social cost equals zero. 
E) marginal social cost is at a minimum.

Question 15

A view of the sunset is

Accepted Answer

A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good. 
A) excludable and rival. 
B) nonexcludable and nonrival. 
C) nonexcludable and rival. 
D) excludable and nonrival. 
E) a private good.

Question 16

The budget of a government department is likely to increase beyond the efficient quantity if

Accepted Answer

A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of social interest theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities. 
A) voters are well informed. 
B) there is rational voter ignorance combined with special interest lobbying. 
C) the political equilibrium can be described in terms of social interest theory. 
D) bureaucrats are rationally ignorant. 
E) there are negative externalities.

Question 17

Use the figure below to answer the following questions.
   
Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture.If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises

Accepted Answer

A) 0 goats. 
B) 35 goats. 
C) 50 goats. 
D) 55 goats. 
E) 40 goats. 
A) 0 goats. 
B) 35 goats. 
C) 50 goats. 
D) 55 goats. 
E) 40 goats.

Question 18

Use the figure below to answer the following question.
   
Figure 17.2.3
-Refer to Figure 17.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity, then each person pays ________ in taxes.

Accepted Answer

A) $125 
B) $62.50 
C) $250 
D) zero 
E) $31.25 
A) $125 
B) $62.50 
C) $250 
D) zero 
E) $31.25

Question 19

All of the following statements regarding rational ignorance are true except

Accepted Answer

A) it results when the cost of information exceeds the expected benefit of acquiring the information. 
B) it allows special interest groups to exert political influence. 
C) combined with special interest groups, it yields inefficiency in the provision of public goods. 
D) it leads to an efficient outcome. 
E) it results in voters having little knowledge about issues that have little effect on their economic welfare. 
A) it results when the cost of information exceeds the expected benefit of acquiring the information. 
B) it allows special interest groups to exert political influence. 
C) combined with special interest groups, it yields inefficiency in the provision of public goods. 
D) it leads to an efficient outcome. 
E) it results in voters having little knowledge about issues that have little effect on their economic welfare.

Question 20

According to public choice theory, a voter will favour a candidate whose political program is

Accepted Answer

A) perceived by the voter to be in his self-interest. 
B) best for the majority of the people. 
C) closest to efficiency. 
D) favoured by the median voter. 
E) efficient. 
A) perceived by the voter to be in his self-interest. 
B) best for the majority of the people. 
C) closest to efficiency. 
D) favoured by the median voter. 
E) efficient.

According to theory, governments make choices that result in an provision of public goods.This outcome occurs in .

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Rational ignorance suggests that

To attract a majority of voters, a political party will

If all voters are well informed about national defence, the quantity of national defence provided by the government will be

Sharing downloaded music

Minimum differentiation among the political parties suggests that

The idea that the platforms of the political parties will tend to become similar over time is

Rational ignorance

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost cure, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. To achieve an efficient quantity, the price of an ITQ is set at

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

The efficient scale of provision of a public good occurs where

A view of the sunset is

The budget of a government department is likely to increase beyond the efficient quantity if

Use the figure below to answer the following question. Figure 17.2.3 -Refer to Figure 17.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity, then each person pays ________ in taxes.

All of the following statements regarding rational ignorance are true except

According to public choice theory, a voter will favour a candidate whose political program is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Filters

Exam 17: Public Goods and Common Resources

According to ________ theory, governments make choices that result in an ________ provision of public goods.This outcome occurs in ________.

An economy's marginal social benefit curve for a private good is obtained by summing the individual marginal

Rational ignorance suggests that

To attract a majority of voters, a political party will

If all voters are well informed about national defence, the quantity of national defence provided by the government will be

Sharing downloaded music

Minimum differentiation among the political parties suggests that

The idea that the platforms of the political parties will tend to become similar over time is

Rational ignorance

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost cure, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. To achieve an efficient quantity, the price of an ITQ is set at

Use the figure below to answer the following questions. Figure 17.3.2 -Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture.The equilibrium in an unregulated market is

The efficient scale of provision of a public good occurs where

A view of the sunset is

The budget of a government department is likely to increase beyond the efficient quantity if

Use the figure below to answer the following question. Figure 17.2.3 -Refer to Figure 17.2.3.The graph provides information about a waste disposal system in a city of 1 million people.If the city installs the efficient capacity, then each person pays ________ in taxes.

All of the following statements regarding rational ignorance are true except

According to public choice theory, a voter will favour a candidate whose political program is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Markets for Factors of Production

Filters

According to theory, governments make choices that result in an provision of public goods.This outcome occurs in .