Question 1

Criteria that economists use in selecting a tax system include:

Accepted Answer

A)  ability to pay and benefits received. 
B)  fairness. 
C)  only benefits received. 
D)  only ability to pay. 
A)  ability to pay and benefits received. 
B)  fairness. 
C)  only benefits received. 
D)  only ability to pay.

Question 2

Use the following to answer question(s): Market Failure
  
-(Exhibit: Market Failure) A competitive market, free of market failures, will achieve the equilibrium point:

Accepted Answer

A)  H. 
B)  I. 
C)  J. 
D)  K. 
A)  H. 
B)  I. 
C)  J. 
D)  K.

Question 3

In the case of a public good, a consumer could not be a free rider.

Accepted Answer

A) True 
 B)False

Question 4

Public choice theorists argue that special interest groups are important to legislators because they:

Accepted Answer

A)  may be able to influence how their members vote. 
B)  raise the cost to legislators of determining how people may vote. 
C)  represent the close friends of the legislators. 
D)  operate from a public interest perspective. 
A)  may be able to influence how their members vote. 
B)  raise the cost to legislators of determining how people may vote. 
C)  represent the close friends of the legislators. 
D)  operate from a public interest perspective.

Question 5

Government expenditures on transfer payments are one type of government purchase.

Accepted Answer

A) True 
 B)False

Question 6

Use the following to answer question(s): Correcting for Market Failure: External Cost
  
-(Exhibit: Correcting for Market Failure: External Cost) Assume that there is an external cost involved as illustrated in the Exhibit.When the government intervenes to correct for the external cost, the output will _______ from _______ to _______ .

Accepted Answer

A)  fall; W; R 
B)  increase; W; R 
C)  fall; R; W 
D)  fall; W; 0 
A)  fall; W; R 
B)  increase; W; R 
C)  fall; R; W 
D)  fall; W; 0

Question 7

Paying a fee every time you use the municipal golf course is an example of the:

Accepted Answer

A)  regressive tax principle. 
B)  ability-to-pay principle. 
C)  progressive tax principle. 
D)  benefits received principle. 
A)  regressive tax principle. 
B)  ability-to-pay principle. 
C)  progressive tax principle. 
D)  benefits received principle.

Question 8

Between 1980 and 2015, total government expenditures generally:

Accepted Answer

A)  were greater than total government receipts. 
B)  were equal to total government receipts. 
C)  increased more slowly than government purchases. 
D)  increased at the same rate as government purchases. 
A)  were greater than total government receipts. 
B)  were equal to total government receipts. 
C)  increased more slowly than government purchases. 
D)  increased at the same rate as government purchases.

Question 9

Give several examples of market failure.Discuss what, if any, corrective action could reduce such problems.

Accepted Answer

Market failure occurs when the allocatio

Question 10

If a tax is levied as a proportional tax, it cannot be regressive in its actual effect.

Accepted Answer

A) True 
 B)False

Question 11

Public choice is the study of government expenditures and tax policy and their impact on the economy.

Accepted Answer

A) True 
 B)False

Question 12

A cattle rancher in Wyoming decides that it is too much trouble to drive 20 miles into town to vote in the county commissioner election.This is an example of:

Accepted Answer

A)  the median voter principle. 
B)  rational abstention. 
C)  rational ignorance. 
D)  rent seeking. 
A)  the median voter principle. 
B)  rational abstention. 
C)  rational ignorance. 
D)  rent seeking.

Question 13

The Case in Point on the Presidential Election of 2000 indicated that approximately _____ of the voting age population cast votes.

Accepted Answer

A)  50% 
B)  75% 
C)  90% 
D)  95% 
A)  50% 
B)  75% 
C)  90% 
D)  95%

Question 14

The market failure of imperfect competition is most likely to result if Peanuts 'R' Us:

Accepted Answer

A)  keeps secret a discovery that excessive consumption of peanut butter causes nearsightedness. 
B)  discards broken peanut shells on to an adjacent recreational area in the production of peanut butter. 
C)  is subject to performance standard regulations by the PBRC (Peanut Butter Regulatory Commission). 
D)  acquires ownership of all peanut butter processing plants in the country. 
A)  keeps secret a discovery that excessive consumption of peanut butter causes nearsightedness. 
B)  discards broken peanut shells on to an adjacent recreational area in the production of peanut butter. 
C)  is subject to performance standard regulations by the PBRC (Peanut Butter Regulatory Commission). 
D)  acquires ownership of all peanut butter processing plants in the country.

Question 15

The gap between government purchases and government expenditures is called the revenue gap.

Accepted Answer

A) True 
 B)False

Question 16

The difference between government purchases and government expenditures is largely due to:

Accepted Answer

A)  taxes. 
B)  public finance. 
C)  merit goods. 
D)  transfer payments. 
A)  taxes. 
B)  public finance. 
C)  merit goods. 
D)  transfer payments.

Question 17

The theory that individuals in government seek to maximize _______ is called ________ theory.

Accepted Answer

A)  their own utility; public finance 
B)  the public welfare; public choice 
C)  their own utility; public choice 
D)  the public welfare; private interest 
A)  their own utility; public finance 
B)  the public welfare; public choice 
C)  their own utility; public choice 
D)  the public welfare; private interest

Question 18

The free-rider problem is most important for:

Accepted Answer

A)  public goods. 
B)  private goods. 
C)  market goods. 
D)  both private and public goods. 
A)  public goods. 
B)  private goods. 
C)  market goods. 
D)  both private and public goods.

Question 19

The best example of a good for which exclusion is not prohibitively costly is:

Accepted Answer

A)  a park. 
B)  an ocean. 
C)  a bicycle. 
D)  national defense. 
A)  a park. 
B)  an ocean. 
C)  a bicycle. 
D)  national defense.

Question 20

Paying a tax of $10 on an income of $100, a tax of $20 on an income of $200, and a tax of $30 on an income of $300 is an example of a(n):

Accepted Answer

A)  regressive tax. 
B)  proportional tax. 
C)  progressive tax. 
D)  inverse tax. 
A)  regressive tax. 
B)  proportional tax. 
C)  progressive tax. 
D)  inverse tax.

Criteria that economists use in selecting a tax system include:

Use the following to answer question(s): Market Failure -(Exhibit: Market Failure) A competitive market, free of market failures, will achieve the equilibrium point:

In the case of a public good, a consumer could not be a free rider.

Public choice theorists argue that special interest groups are important to legislators because they:

Government expenditures on transfer payments are one type of government purchase.

Paying a fee every time you use the municipal golf course is an example of the:

Between 1980 and 2015, total government expenditures generally:

Give several examples of market failure.Discuss what, if any, corrective action could reduce such problems.

If a tax is levied as a proportional tax, it cannot be regressive in its actual effect.

Public choice is the study of government expenditures and tax policy and their impact on the economy.

A cattle rancher in Wyoming decides that it is too much trouble to drive 20 miles into town to vote in the county commissioner election.This is an example of:

The Case in Point on the Presidential Election of 2000 indicated that approximately _____ of the voting age population cast votes.

The market failure of imperfect competition is most likely to result if Peanuts 'R' Us:

The gap between government purchases and government expenditures is called the revenue gap.

The difference between government purchases and government expenditures is largely due to:

The theory that individuals in government seek to maximize _ is called __ theory.

The free-rider problem is most important for:

The best example of a good for which exclusion is not prohibitively costly is:

Paying a tax of $10 on an income of $100, a tax of $20 on an income of $200, and a tax of $30 on an income of $300 is an example of a(n):

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 15: Public Finance and Public Choice

Criteria that economists use in selecting a tax system include:

Use the following to answer question(s): Market Failure -(Exhibit: Market Failure) A competitive market, free of market failures, will achieve the equilibrium point:

In the case of a public good, a consumer could not be a free rider.

Public choice theorists argue that special interest groups are important to legislators because they:

Government expenditures on transfer payments are one type of government purchase.

Paying a fee every time you use the municipal golf course is an example of the:

Between 1980 and 2015, total government expenditures generally:

Give several examples of market failure.Discuss what, if any, corrective action could reduce such problems.

If a tax is levied as a proportional tax, it cannot be regressive in its actual effect.

Public choice is the study of government expenditures and tax policy and their impact on the economy.

A cattle rancher in Wyoming decides that it is too much trouble to drive 20 miles into town to vote in the county commissioner election.This is an example of:

The Case in Point on the Presidential Election of 2000 indicated that approximately _____ of the voting age population cast votes.

The market failure of imperfect competition is most likely to result if Peanuts 'R' Us:

The gap between government purchases and government expenditures is called the revenue gap.

The difference between government purchases and government expenditures is largely due to:

The theory that individuals in government seek to maximize _______ is called ________ theory.

The free-rider problem is most important for:

The best example of a good for which exclusion is not prohibitively costly is:

Paying a tax of $10 on an income of $100, a tax of $20 on an income of $200, and a tax of $30 on an income of $300 is an example of a(n):

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

The theory that individuals in government seek to maximize _ is called __ theory.