Question 1

It has been suggested by some economists that rent seeking activity often occurs within families,particularly when an inheritance is involved.

Accepted Answer

A) True 
 B)False  True

Question 2

A state of rational ignorance

Accepted Answer

A)  is a reflection of too little education.
B)  makes sense only if information is a free good.
C)  exists only in ideal representative democracies.
D)  makes sense when the costs of becoming informed are greater than the benefits.
E)  none of the above D

Question 3

A subset of the general population that holds an intense preference with respect to a particular government activity is called a

Accepted Answer

A)  public-service group.
B)  special interest group.
C)  union.
D)  federation. B

Question 4

It has often been remarked that Democratic candidates are more liberal in the Democratic primaries and Republican candidates are more conservative in the Republican primaries than either is in the general election.The explanation for this is most probably that

Accepted Answer

A)  they are facing politically different opponents in the two elections.
B)  the median voter preferences are more to the left (right) in the primaries than in the general election.
C)  more people vote in the general election than in the primaries.
D)  candidates are not as likely to locate the position of the median voter in the (earlier) primaries as they are in the (later) general election.

Question 5

Special interest groups often engage in rent seeking,which is a socially wasteful activity.

Accepted Answer

A) True 
 B)False

Question 6

Candidate X and Candidate Y have a debate.X's advisers believe that one result of the debate is that Y will appear to the voters as further to the left than before.This is good news for X

Accepted Answer

A)  if Y was already left-of-center before the debate.
B)  if Y was right-of-center before the debate.
C)  no matter what Y's previous position was.
D)  under no circumstances.

Question 7

Which of the following statements is false?

Accepted Answer

A)  In some instances,simple majority voting leads to a project being undertaken even though the total costs of the project exceed the total benefits.
B)  Simple majority voting fails to take into account the intensity of individuals' preferences.
C)  Public choice economists often explain low voter turnouts in terms of the individual costs and benefits of voting.
D)  If an individual will only vote if he or she feels that his or her vote will make a difference in the election,it is likely that he or she will vote.

Question 8

The simple majority decision rule may generate results that are

Accepted Answer

A)  efficient,because the projects undertaken are the ones desired by more than 50 percent of the people.
B)  efficient,because projects are undertaken only if total benefits exceed total costs.
C)  efficient,because the intensity of individuals' preferences are considered.
D)  inefficient when the total benefits of projects undertaken are less than the total costs.
E)  inefficient when the intensity of individuals' preferences are considered.

Question 9

Simple majority rule will almost always generate efficient outcomes.

Accepted Answer

A) True 
 B)False

Question 10

A college professor berates his political science students for being uninformed on current political and government issues.For example,most of them do not know who represents them in the U.S.House of Representatives.He tells his students that they will never get very far in life by staying so uninformed and uninterested.The professor is probably overlooking the fact that

Accepted Answer

A)  people are uninformed and uninterested in only some things-not all things.
B)  his students could be choosing rational ignorance.
C)  by not taking out time to find out certain things,his students have more time to study for his tests.
D)  a,b,and c
E)  none of the above

Question 11

Rational ignorance refers to voter-citizens choosing to be uninformed about politics and government on an individual basis because

Accepted Answer

A)  of apathy.
B)  of ignorance.
C)  of laziness.
D)  they believe the benefits of becoming informed are greater than the costs.
E)  they believe the benefits of becoming informed are less than the costs.

Question 12

Public choice theory assumes that those involved in the public sector are generally motivated by

Accepted Answer

A)  public spirit.
B)  altruism.
C)  the desire to achieve allocative efficiency.
D)  the same factors involved in the private sector.
E)  a and b

Question 13

In his article Straight Talk About Economic Literacy,economist _______________________ said,"Citizens can vote even if they have no idea what they are doing.If enough voters fit that description,democratic governments are bound to make foolish decisions."

Accepted Answer

A)  Milton Friedman
B)  James Buchanan
C)  Bryan Caplan
D)  John Maynard Keynes

Question 14

Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are

Accepted Answer

A)  rationally ignorant.
B)  not acting in their own best interests.
C)  members of special interest groups.
D)  shortsighted.

Question 15

Constitutional economists

Accepted Answer

A)  assert that within a given set of institutions,constraints,laws and rules,outcomes might be the same no matter who is elected to office.
B)  study the type of constraints that individuals might seek to place upon themselves in order to achieve some objective that doesn't seem achievable in a non-constrainable environment.
C)  assert that better outcomes arise from changing the political party in power at any given point in time than from changing institutions and constraints.
D)  b and c
E)  a and b

Question 16

Rational ignorance is

Accepted Answer

A)  a result of our educational system.
B)  the curtain,or wall,of knowledge between the persons that are educated and those that are not.
C)  the curtain behind which people choose to hide to avoid knowledge about poverty and,in general,the unequal distribution of income.
D)  the curtain separating educated voters from uneducated voters.
E)  none of the above

Question 17

Logrolling refers to the

Accepted Answer

A)  exchange of political favors by corporations.
B)  need for the president to veto an entire bill when only certain parts of the bill are objectionable.
C)  exchange of votes to gain support for legislation.
D)  a and b
E)  none of the above

Question 18

Public choice theorists insist that when a person goes from public to private employment,his or her motivations __________ while the institutional arrangements shaping his or her actions __________.

Accepted Answer

A)  remain the same;change
B)  remain the same;also remain the same
C)  change;also change
D)  change;remain the same

Question 19

Logrolling consists of

Accepted Answer

A)  exchanging votes to gain support for legislation.
B)  spreading the costs of a piece of special interest legislation over many millions of people.
C)  attempts directed at slowing down the growth of rational ignorance.
D)  increasing taxes on some people and lowering taxes on other people.
E)  none of the above

Question 20

Rent seeking is the actions of

Accepted Answer

A)  individuals and groups who spend resources to influence public policy in the hope of redistributing income to themselves from others.
B)  a subset of the population that hold intense preferences for a particular government service.
C)  some citizens who choose not to acquire information because the costs of acquiring the information are greater than the benefits.
D)  politicians who exchange votes to gain support for their own legislation.

Exam 19: Debates in Macroeconomics Over the Role and Effects of Government