Deck 18: Public Choice, Taxes, and the Distribution of Income

Question 1

According to public choice theory, policymakers

A)place the interests of the public above their own self-interest.
B)are likely to pursue their own self-interest, even if their self-interest conflicts with the public interest.
C)act in ways to maximize economic efficiency.
D)act in ways to bring about an equitable distribution of society's wealth.

Answer 1

B

Question 2

Tax laws affect

A)economic efficiency but not equity.
B)equity but not economic efficiency.
C)consumption and production, not efficiency and equity.
D)both efficiency and equity.

Answer 2

D

Question 3

A situation where a member of Congress votes to approve a bill in exchange for favorable votes from other members on other bills is called

A)rent seeking.
B)logrolling.
C)regulatory capture.
D)special interest legislation.

Answer 3

B

Question 4

Which of the following statements about rent seeking is false?

A)Rent seeking often involves governments because governments transfer huge amounts of funds that economic agents must compete for.
B)A person is engaging in rent-seeking behavior when he uses the political process to acquire ownership of a resource that belongs to the public.
C)Because rent seeking redistributes society's resources, anyone engaging in such behavior is violating the law.
D)If a firm can benefit from government intervention in the economy, it is more likely to spend resources attempting to secure this intervention than toward innovating its product to gain a competitive edge in the market.

Question 5

The median voter model implies that

A)many people will be satisfied with the amount of spending on government funded projects.
B)many people will be dissatisfied with the amount of spending on government funded projects.
C)people in the political middle will be dissatisfied with the amount of spending on government funded projects.
D)spending on government funded projects reflects the preferences of only those far away from the median.

Question 6

Table 18-1

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Increased border security.Table 18-1 shows three voters' rankings of the alternatives.
Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to research on Alzheimer's and increased border security

A)Ivy and Jasmine vote for Alzheimer's research, Rose votes for increased border security, and Alzheimer's research wins.
B)Ivy and Rose vote for increased border security, Jasmine votes for Alzheimer's research, and increased border security wins.
C)Jasmine and Rose vote for Alzheimer's research, Ivy votes for increased border security, and Alzheimer's research wins.
D)Jasmine and Ivy vote for increased border security, Rose votes for Alzheimer's research, and increased border security wins.

Question 7

The public choice model

A)examines the degree of market power that the public exerts in a market economy.
B)examines the public's role in appointing politicians and ensuring that elected officials act in ways to reflect the public's preferences.
C)applies economic analysis to government decision making.
D)applies economic analysis to the collective decision making of consumers.

Question 8

Why is a typical person likely to gather more information when buying a new car than when voting for a member of Congress?

A)because a person's preferences are more likely to be met with little effort in the political sphere but this is not the case when buying a car in the private marketplace
B)because it is less costly to acquire information about consumer items than it is about political candidates
C)because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome
D)because the effects of buying a car are long term while a member of Congress has a relatively short tenure

Question 9

The Arrow impossibility theorem states that

A)no system of voting can be devised that will always consistently represent the underlying preferences of voters.
B)it is impossible for a majority voting system not to consistently represent the preferences of voters.
C)it is impossible to separate corporate desires from public bureaucracy.
D)no system of voting can be devised that will ensure a 100 percent voter turnout.

Question 10

Table 18-1

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Increased border security.Table 18-1 shows three voters' rankings of the alternatives.
Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to education subsidies and increased border security

A)Ivy and Jasmine vote for education subsidies, Rose votes for increased border security, and education subsidies wins.
B)Ivy and Rose vote for increased border security, Jasmine votes for education subsidies, and increased border security wins.
C)Jasmine and Rose vote for education subsidies, Rose votes for increased border security, and education subsidies wins.
D)Jasmine and Ivy vote for increased border security, Rose votes for education subsidies, and increased border security wins.

Question 11

The median voter theorem states that the outcome of a majority vote

A)tends to favor the preferences of high-income individuals and ignore the median voter.
B)is likely to represent the preferences of society's middle-income voter.
C)is likely to represent the preferences of the voter who is in the political middle.
D)is determined by the average consumer and producer in an economy.

Question 12

What are the two types of taxes that working individuals pay on their earnings?

A)individual income tax and sales tax
B)payroll tax and sales tax
C)individual income tax and social insurance taxes
D)property tax and payroll tax

Question 13

The voting paradox suggests that the "voting market," as represented by elections

A)leads to a superior outcome in representing consumer preferences compared to the private market for goods and services.
B)may often lead to an inefficient outcome in representing consumer preferences compared to the private market for goods and services.
C)is no different from the private market for goods and services in terms of representing consumer preferences.
D)may not lead to an efficient outcome but certainly leads to a more equitable outcome in terms of distributing goods and services.

Question 14

One argument advanced in favor of not increasing the income tax on individuals with high income is that

A)increasing income tax increases wealth which contributes to increases in GDP.
B)increasing the income tax on these individuals will reduce economic efficiency.
C)increasing the income tax affects mostly middle-income and low-income individuals who are already paying heavy income taxes.
D)not increasing income taxes will discourage corporations from increasing investment.

Question 15

Table 18-1

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Increased border security.Table 18-1 shows three voters' rankings of the alternatives.
Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.The first pair considered is between subsidies for education and research on Alzheimer's.The second pair considered is between Alzheimer's research and increased border security.The third pair considered is between education subsidies and increased border security.In this case, the collective preferences of the voters

A)turn out to be transitive and will yield a consistent outcome.
B)turn out to be transitive but will not result in a consistent outcome.
C)turn out not to be transitive and will not result in a consistent outcome.
D)turn out not to be transitive but will yield a consistent outcome.

Question 16

The median voter theorem will be an accurate predicator of the outcomes of elections

A)only when voter turnout is very high.
B)when a majority of voters have preferences very similar to those of the median voter.
C)when a majority of voters have preferences different from those of the median voter.
D)regardless of whether preferences among voters are similar or different from those of the median voter.

Question 17

Table 18-1

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Increased border security.Table 18-1 shows three voters' rankings of the alternatives.
Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to subsidies for education and research on Alzheimer's

A)Ivy and Jasmine vote for education subsidies, Rose votes for Alzheimer's research, and education subsidies wins.
B)Ivy and Rose vote for education subsidies, Jasmine votes for Alzheimer's research, and education subsidies wins.
C)Jasmine and Rose vote for Alzheimer's research, Ivy votes for education subsidies, and Alzheimer's research wins.
D)Jasmine and Ivy vote for Alzheimer's research, Rose votes for education subsidies, and Alzheimer's research wins.

Question 18

What is the voting paradox?

A)the observation that less than 60 percent of those eligible to vote actually vote
B)the observation that majority voting may not always result in consistent choices
C)the idea that wealthy corporations are able to sway politicians to act in ways contrary to the desires of the majority
D)people are aware that their votes will not change the political outcome since these outcomes are predetermined by a group of influential politicians

Question 19

Which of the following is not an example of rent-seeking behavior?

A)competition for subsidies
B)lobbying the government to impose tariffs on certain imported products
C)competition for the exclusive right to import a product
D)engaging in aggressive advertising that slams a competitor's product

Question 20

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives:
A.subsidies for education
B.research on Alzheimer's
C.increased border security
If voters prefer a to b and b to c, then if preferences are transitive,

A)they should prefer a to c.
B)they should prefer c to a.
C)they should be indifferent between a and c.
D)it is not always possible to rank voters' preferences between a and c.

Question 21

Some economists who use the public choice model to explain the ways government intervenes in the economy believe that regulatory capture results when an agency or commission is given authority over a particular industry or product.Which of the following is the best example of regulatory capture?

A)The Food and Drug Administration (FDA)has increased the time and expense pharmaceutical firms incur to receive approval to market a new drug.
B)A federal government agency hires more employees than it requires to regulate an industry because it does not seek to minimize costs or maximize the agency's profits.
C)The head of an agency is required to testify before Congress because Congress controls the size of the agency's budget. Congress "captures" the agency because of its budget authority.
D)Firms that were regulated by the Interstate Commerce Commission (ICC)attempted for many years to influence the ICC's actions.

Question 22

A common belief among political analysts is that someone running for his or her party's nomination for president of the United States must choose a different strategy once the nomination is secured.To be nominated, the candidate must appeal to voters from one party - Democrat or Republican - but in a general election a party's nominee must appeal to voters from both parties as well as independent voters.Which of the following offers the best explanation for this change in strategy?

A)the Arrow impossibility theorem
B)the voting paradox
C)the median voter theorem
D)rent seeking

Question 23

Logrolling may result in

A)legislation that yields economy-wide benefits, the funding for which is borne primarily by a few of the smallest states.
B)a majority of Congress supporting legislation that benefits the economic interests of a few, while harming the economic interests of a much larger group.
C)members of Congress selling their votes on proposed legislation to the highest bidder.
D)creating limited incentives for policymakers to consider the immediate consequences of their proposed legislation.

Question 24

Economists James Buchanan and Gordon Tullock are well-known for developing

A)the impossibility theorem.
B)the voting paradox.
C)the public choice model.
D)the concept of government failure.

Question 25

What is regulatory capture?

A)It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign.
B)It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
C)It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest.
D)It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest.

Question 26

Rational ignorance

A)explains why consumers ignore sunk costs when they vote.
B)explains the Arrow impossibility theorem.
C)refers to attempts by special interests to use government action to make themselves better off at the expense of others.
D)helps to explain why rent seeking by special interest groups occurs.

Question 27

What is logrolling?

A)a situation where a policymaker votes to approve a bill in exchange for favorable votes from his colleagues on other bills
B)a situation where policymakers transfer resources from those voters who are unlikely to have a huge impact on the political outcome to those who contribute to political campaigns
C)a situation where a policymaker accepts bribes to prevent proposed legislation from coming to a vote
D)a situation where a policymaker gets the government to fund a non-essential project benefiting her family members

Question 28

One important difference between the political process and the market process is that

A)the political process results in collective actions in which not everyone is required to participate, while in the market process individuals are obliged to participate.
B)the political process results in collective actions in which everyone is obliged to participate, while in the market process individuals are free to participate or not.
C)the political process results in collective actions that maximize economic surplus, while the market process may lead to efficiency losses.
D)the political process results in collective actions in which everyone is made better off, while the market process results in actions that favor some groups only.

Question 29

The public choice model assumes that government policymakers

A)must promote the public interest at the expense of their own self-interests in order to be re-elected.
B)will pursue their self-interests in personal affairs but only if it does not conflict with the public interest.
C)will often act irrationally in their personal affairs, but will act rationally when they promote the public interest.
D)are likely to pursue their own self-interests, even if their self-interests conflict with the public interest.

Question 30

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle is called

A)the mean (or average)voter theorem.
B)the voting paradox.
C)the Arrow impossibility theorem.
D)the median voter theorem.

Question 31

Both presidents Kennedy and Reagan proposed significant cuts in income taxes because

A)at the time of their proposals the federal government was experiencing budget surpluses; that is, tax revenue exceeded government expenditures.
B)they wanted to offset their proposals to increase other taxes.
C)state governments had increased their taxes and they believed the tax cuts they proposed would result in most citizens paying about the same total state and federal taxes.
D)they believed that the tax cuts would enhance economic efficiency.

Question 32

When members of Congress vote to pass new legislation, they will

A)always vote for the alternative favored by a majority of the voters.
B)fail to consistently represent the underlying preferences of voters.
C)always vote for the alternative favored by a plurality of the voters if there is no majority position.
D)always fail to represent the underlying preferences of voters.

Question 33

Both presidents Kennedy and Reagan proposed significant cuts in income taxes.Opponents of these tax cut proposals argued that

A)the tax cuts would benefit high-income taxpayers.
B)cutting state sales taxes, rather than federal income taxes, would result in greater economic efficiency.
C)while the tax cuts would result in greater economic efficiency, there was too much opposition to the tax cuts in Congress. As it turned out, Congress ultimately approved both tax cut proposals.
D)it would be better to cut taxes on corporate profits.

Question 34

Congressman Gallstone seeks support from his colleagues for a bill he sponsors that will establish a new national park in his district.He offers to support Congresswoman Disrail's proposal to build a new library in her district in exchange for her vote for his national park bill.This is an example of

A)regulatory capture.
B)logrolling.
C)rational ignorance.
D)government failure.

Question 35

The political process is more likely to serve the interests of individuals whose preferences are in the middle, rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

A)logrolling
B)the voting paradox
C)the Arrow impossibility theorem
D)the median voter theorem

Question 36

The Arrow impossibility theorem explains

A)why there is no system of voting that will consistently represent the underlying preferences of voters.
B)why government regulation of private markets will always result in a reduction in economic efficiency in these markets.
C)why voters are always rationally ignorant.
D)why it is not possible to provide the economically efficient amount of any public good.

Question 37

Economist Kenneth Arrow has shown mathematically that no system of voting will consistently represent the underlying preferences of voters.This finding is called

A)the Arrow impossibility theorem.
B)Arrow's median voter model.
C)Arrow's Amendment to the public choice model.
D)Arrow's majority vote paradox.

Question 38

What is meant by the term "rational ignorance"?

A)It refers to the absence of a negative incentive, for example, a fine for not voting, which results in a low voter turnout.
B)It refers to a situation where one policymaker deliberately approves a bill he does not support in exchange for a future favorable vote for his own cause.
C)It means the lack an economic incentive for voters to become informed about a pending legislation.
D)It refers to the fact that policymakers and their constituents have different ideas of what it means to behave rationally and each party deliberately ignores the other's view.

Question 39

The Arrow impossibility theorem

A)explains why people can be rational as well as ignorant at the same time.
B)explains why voting systems do not consistently represent the preferences of voters.
C)explains why candidates for public office must represent the preferences of the political middle.
D)explains why it is impossible, in most cases, to eliminate special-interest legislation after it has become law.

Question 40

Table 18-2

Refer to Table 18-2.The table above lists three policy alternatives that the U.S.Senate will vote on, along with the ranking of these alternates.The Senate must decide which of these alternatives should receive an additional $1 billion of funding, and there is enough money in the federal budget for only one of these alternatives.If a series of votes is taken in which each pair of alternatives is considered (homeland security and education; homeland security and medical research; education and medical research)which of the following will result from these votes?

A)When the vote is between homeland security and education, the Senators will vote for education to receive funding.
B)The Senators' votes will demonstrate transitivity.
C)The results will illustrate the voting paradox.
D)The results from the voting will illustrate the median voter theorem.

Question 41

One result of the public choice model is that most economists believe that

A)when market failure occurs, government intervention will always lead to a more efficient outcome.
B)government intervention will always result in a reduction in economic efficiency in regulated markets.
C)policymakers may have incentives to intervene in the economy in ways that do not promote economic efficiency.
D)the voting paradox will prevent voters from selecting the best person for public office.

Question 42

The median voter theorem states that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

Question 43

What is the term that explains why voters often lack knowledge of pending legislation, and lack knowledge of the views of candidates for office on a range of issues that affect their own (the voters')welfare?

A)the voting paradox
B)logrolling
C)rational ignorance
D)regulatory capture

Question 44

The public choice model asserts that the self-interest of policymakers is likely to cause them to take actions that are inconsistent with the preferences of voters, even where those preferences are clear.

Question 45

Financial contributions to the campaigns of members of Congress, state legislators, and other elected officials by firms that seek special interest legislation that make the firms better off are

A)examples of rent seeking.
B)illegal.
C)the result of the voting paradox.
D)irrational because elected officials will almost always act in the interest of the voters who have to pay the cost of the legislation.

Question 46

Many economists believe that when the federal government establishes an agency to regulate a particular industry, the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

A)regulatory capture
B)logrolling
C)special-interest regulation
D)the regulatory paradox

Question 47

The public choice model raises questions about the government's ability to regulate economic activity efficiently.Which of the following statements represents the views of most economists with regard to the role of government?

A)Congress should abolish the Food and Drug Administration, the Environmental Protection Agency, and other agencies and commissions because the costs of their actions exceed the benefits they provide to the public.
B)Government should do more to regulate markets. The public choice model has shown that rent seeking and rational ignorance affect more markets than are currently subject to regulation.
C)U.S. citizens can afford more government regulation if the cost of this regulation is borne mostly by taxpayers with the highest incomes.
D)Agencies such as the Food and Drug Administration and the Environmental Protection Agency can serve a useful purpose, but we need to take the costs of regulation into account along with the benefits.

Question 48

Which of the following is an example of rent seeking behavior?

A)Apple earned large profits from the development and sale of the iPhone.
B)Amazon introduced the Kindle to compete with Sony's Digital Reader. Amazon was motivated by the desire to earn profits from the Kindle but also increased the choice of digital music players available to consumers.
C)U.S. sugar firms convinced Congress to impose a quota on imports of sugar.
D)Recent increases in cigarette taxes faced little opposition from voters, many of whom were rationally ignorant with respect to the tax.

Question 49

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.Which of the following explanations for Flack's vote is most consistent with the public choice model?

A)Congressman Flack did not have time to read and understand all of the legislation he voted on. Members of Congress often depend on their staffs to read proposed legislation and recommend how they should vote.
B)Legislators such as Congressman Flack are similar to other decision-makers in that they sometimes make irrational choices.
C)Congressman Flack will support programs of legislators from his own party, regardless of who benefits from these programs.
D)Congressman Flack expects Congressman Walpole's support for programs that will benefit Flack's constituents.

Question 50

A key insight of the public choice model is that public policymakers are likely to pursue the public's interest, even if their self-interests conflict with the public interest.

Question 51

Unlike the market process, in the political market it is possible for some individuals to receive very large benefits from the political process without any significant impact on their tax bills.

Question 52

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.The public choice model suggests that Flack's vote is best explained by which of the following?

A)rational ignorance
B)party loyalty
C)logrolling
D)the voting paradox

Question 53

Which of the following is a consequence of the voting paradox?

A)A majority of voters elect a candidate that does not represent the preferences of the voter who is in the political middle.
B)Politicians support small groups of individuals and firms that benefit from special interest legislation, rather than a much larger group of voters who pay the cost for this legislation.
C)Individuals and firms who benefit from government actions engage in rent seeking.
D)The collective preferences of voters are not transitive and voting outcomes are inconsistent.

Question 54

Some individuals seek to use government action to make themselves better off at the expense of others.The actions of these individuals

A)are examples of fraud; but these individuals usually avoid prosecution because of logrolling and rational ignorance.
B)are examples of rent seeking.
C)offer proof that Adam Smith's "invisible hand" is not valid.
D)are evidence of the voting paradox.

Question 55

If voters lack an economic incentive to become informed about pending legislation, then their preferences become a constraint on legislators voting for rent-seeking legislation.

Question 56

Which of the following statements refers to rent seeking?

A)"Laws passed by the federal government often provide benefits for a small number of individuals. These individuals, in turn, have an incentive to contribute to the campaigns of politicians who pass these laws."
B)"The federal government should spend more money on programs that help low income citizens and less money on national defense."
C)"The role of the federal government in the U.S. economy grew significantly after the Great Depression. Government spending and taxes are a much greater proportion of total income today than they were in 1929."
D)"There is an opportunity cost whenever the federal government spends tax revenue. For example, an additional $1 billion spent on national defense means there will be less revenue for highway construction and maintenance or some other program."

Question 57

Economists often analyze the interaction of individuals and firms in markets.Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others, a process that is referred to as

A)rent seeking.
B)logrolling.
C)government failure.
D)the public choice initiative.

Question 58

The public choice model can be used to examine voting models that contrast the manner in which collective decisions are made by governments (state, local, and federal)and the manner in which individual choices are made in markets.Which of the following descriptions is consistent with the difference between collective decision-making and decision-making in markets?

A)Everyone who votes must agree with a decision made collectively through government, but in markets individuals can make their own choices.
B)Individuals are less likely to see their preferences represented in the outcomes of government policies than in the outcomes of markets.
C)The cost of a government policy is determined by a majority vote of members of the public; decisions made in markets are based on individual willingness to pay.
D)Choices made through government policies are more important than decisions individuals make through markets.

Question 59

Which of the following is used to argue that the self-interest of public policymakers will often lead to actions that are inconsistent with the preferences of the voters they represent?

A)the voting paradox
B)the median voter theorem
C)rent seeking
D)transitivity of voters' preferences

Question 60

When the majority of voters have preferences very different from those of the median voter, then the median voter theorem will lead to accurate predictions of the outcomes of elections.

Question 61

If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,000 on an income of $30,000, then over this range of income the tax is

A)regressive.
B)proportional.
C)progressive.
D)There is insufficient information to answer the question.

Question 62

What is rent seeking and how is it related to regulatory capture?

Question 63

Rent-seeking behavior, unlike profit-maximizing behavior in competitive markets, wastes society's scarce resources.

Question 64

If, as your taxable income decreases, you pay a larger percentage of your taxable income in taxes, then the tax is

A)regressive.
B)proportional.
C)progressive.
D)unfair.

Question 65

A key assumption of the public choice model is that government policymakers will pursue their own self-interests.Economists assume that consumers and firms pursue their own self-interests when they interact in competitive markets and this interaction results in efficient economic outcomes.Does the pursuit of self-interest by policymakers result in efficient economic outcomes?

Question 66

If, as your taxable income decreases, you pay a smaller percentage of your taxable income in taxes, then the tax is

A)regressive.
B)proportional.
C)progressive.
D)unfair.

Question 67

The largest source of revenue for the federal government of the United States is from

A)tariffs collected on imported goods.
B)property taxes imposed on private property.
C)sales taxes on items purchased for consumption.
D)individual income taxes.

Question 68

Logrolling refers to attempts by individuals to use government action to make themselves better off at the expense of others.

Question 69

An example of a payroll tax in the United States is

A)Social Security taxes.
B)taxes on corporate profit.
C)excise taxes on gasoline.
D)property taxes on real estate.

Question 70

Table 18-4

Refer to Table 18-4.The table above outlines the rankings of three members of the U.S.House of Representatives on three spending alternatives.Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom, Dick, and Harriet, all members of the House of Representatives, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding.Three votes will be taken: (1)Foreign Aid and Post-Secondary Education (2)Foreign Aid and Roads and Bridges and (3)Post-Secondary Education and Roads and Bridges.
Determine whether the voting paradox will occur as a result of these votes.

Question 71

What is the relationship between market failure and government failure?

Question 72

Table 18-3

Refer to Table 18-3.The table above outlines the rankings of three members of the U.S.Senate on three spending alternatives.Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Bart, Lisa, and Maggie, all members of the Senate, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding.Three votes will be taken: (1)Immigration Reform and Unemployment Benefits (2)Immigration Reform and Social Security Reform and (3)Unemployment Benefits and Social Security Reform.
Show the results of each vote and determine whether the voting paradox will occur as a result of these votes.

Question 73

At the state and local levels in the United States, the largest source of tax revenue is

A)individual income taxes.
B)property tax on real estate.
C)sales tax.
D)grants from the federal government.

Question 74

Define logrolling.Explain why logrolling often results in legislation that benefits the economic interests of a few, while harming the interests of a larger group of people.

Question 75

Public schools in the United States get most of their operating funds from

A)government production and subsidies.
B)income taxes on corporate profits.
C)local property taxes.
D)tariffs collected on imported goods.

Question 76

If you pay a constant percentage of your taxable income in taxes, the tax is

A)regressive.
B)proportional.
C)progressive.
D)random.

Question 77

Former Alabama Governor George Wallace ran for president several times, once as a third-party candidate in 1968.Wallace claimed there was "not a dime's worth of difference" between the Democratic and Republican parties during one of his campaigns.How does Wallace's comment relate to the median voter theorem?

Question 78

What is the difference between the voting paradox and the Arrow impossibility theorem?

Question 79

Is a typical person likely to gather more information when buying a new computer or when voting for a member of the U.S.Senate? Why?

Question 80

If you pay $2,000 in taxes on an income of $20,000, and a tax of $2,700 on an income of $30,000, then over this range of income the tax is

A)regressive.
B)proportional.
C)progressive.
D)There is insufficient information to answer the question.