Deck 5: Public Choices and the Political Process

Question 1

The median voter is the one whose most-preferred political outcome is the median of the most-preferred outcome of all those voting.

Answer 1

True

Question 2

Political transactions costs are likely to be greater under unanimous consent than under majority rule.

Answer 2

True

Question 3

If all voters have single-peaked preferences, a political equilibrium will not be possible under majority rule.

Answer 3

False

Question 4

A voter's most-preferred political outcome will change if, other things being equal, that person's tax share per unit of the public good is changed.

Question 5

A bureaucrat who seeks to maximize the annual size of his budget each year will propose annual output levels corresponding to the amount for which MSB = MSC.

Question 6

Logrolling always succeeds in passing two paired issues that could not pass if voted on separately.

Question 7

A political equilibrium for a pure public good is generally independent of the collective choice rule used.

Question 8

A community currently hires 10 security guards per week to patrol their neighborhood. Each secu?rity guard costs $300 per week. Assuming that the tax-sharing arrangement agreed to results in each of 300 voters paying the same tax share, each voter pays a weekly tax bill of:

A) $1.
B) $3.
C) $10.
D) $30.

Question 9

Unanimous consent is a collective choice rule that will protect the rights of minorities.

Question 10

Cycling can occur in elections under majority rule if some voters have multiple-peaked prefer?ences.

Question 11

A budget-maximizing bureaucrat seeks funding levels where the total social cost equals the total social benefit.

Question 12

A person for whom the marginal benefit of a public good declines as more is made available has single-peaked preferences.

Question 13

A small community currently taxes residents to provide monthly community concerts. Voter A currently pays a tax per concert equal to $50 per month. This voter receives a marginal benefit of $75 at the current political equilibrium number of concerts per month. Voter A:

A) is the median voter.
B) would be made better off if the number of monthly concerts were increased.
C) would be made worse off if the number of monthly concerts were increased.
D) has achieved his most-preferred political outcome for monthly concerts.

Question 14

A person with multiple-peaked preferences is always made worse off as the quantity of a pure public good is increased, or decreased, once he or she attains his or her most-preferred political outcome.

Question 15

A ration person's most preferred political outcome is when the cost of the quantity of government-supplied goods is below the marginal benefit.

Question 16

A proposal is put forward to increase the number of police officers. You estimate that your mar?ginal benefit from police protection just equals your tax per police officer at the number of officers that would constitute the police force if the proposal passes. You will therefore vote in favor of the proposal.

Question 17

Special interest groups are more likely to gain income through the political process if they are a large percentage of the population.

Question 18

If all voters have the identical most-preferred political outcome, given their tax shares, then the political equilibrium under majority rule will be identical to the political equilibrium under unani?mous consent.

Question 19

Logrolling can allow more than one issue of minority interest to be passed.

Question 20

Political externalities are likely to be negligible when collective choices are made under majority rule.

Question 21

Explain why all voters will have single-peaked preferences for a pure public good if the marginal benefit they receive from that good declines as more is made available per year. Explain how each voter decides whether to vote in favor of or against a proposal for a certain quantity of the pure public good to be made available per year. Assuming that tax shares are given, what can you say about the political equilibrium under majority rule? Show how an increase in the average cost of producing the pure public good will affect the political equilibrium.

Question 22

Which of the following collective choice rules is likely to incur the highest political transactions costs?

A) two-thirds majority rule
B) simple majority rule
C) plurality rule
D) unanimous consent

Question 23

A voter's most-preferred political outcome will be that for which the:

A) marginal benefit of a pure public good is equal to the voter's tax share per unit.
B) total benefit per unit of a pure public good is equal to the voter's tax share per unit.
C) difference between the marginal benefit of a pure public good and the voter's tax share per unit is maximized.
D) marginal benefit of a pure public good is equal to zero, no matter what the voter's tax share per unit.

Question 24

A voter may choose not to vote in an election between two alternatives because:

A) he or she is indifferent between the two alternatives.
B) his or her probability of influencing the result is zero.
C) his or her most-preferred alternative is far from the two offered on the ballot.
D) all of the above

Question 25

The demand curve for a pure public good is:

A) obtained by adding the quantity demanded at each possible price for all consumers.
B) obtained by summing the marginal benefits of each consumer for each possible quantity.
C) always upward sloping.
D) always a flat line.

Question 26

Which of the following collective choice rules is likely to have the lowest political externalities?

A) two-thirds majority rule
B) simple majority rule
C) plurality rule
D) unanimous consent

Question 27

The plurality rule is:

A) a collective bargaining rule.
B) a rule that is guaranteed to have majority decision.
C) a means of determining between only two possible outcomes.
D) a rule that cannot lead to a minority decision.

Question 28

Voter A will normally vote in favor of one security guard per week because his marginal benefit is $125 and his tax share is $100 per week. Voter A receives zero marginal benefit from one concert a week and would vote against it. Voter B receives $125 marginal benefit from one concert per week but no marginal benefit from one security guard. One concert per week also will fail to gain a majority when put to the vote. Assuming that both Voter A and Voter B will pay $100 per week in tax for each concert and each security guard,

A) they can both gain by engaging in logrolling on the two issues.
B) pairing the issues on one ballot will result in both Voter A and Voter B voting in favor of the combined issue.
C) pairing the issues on one ballot will result in both Voter A and Voter B voting against the com?bined issue.
D) implicit logrolling will result in Voter A voting in favor of the combined issue, but in Voter B voting against it.

Question 29

If bureaucrats seek to maximize the size of their budgets, they will:

A) seek to fund levels of services up to the point at which MSC = MSB.
B) seek to fund levels of services for which TSB > TSC.
C) seek to fund levels of services for which MSC > MSB.
D) both b and c

Question 30

A public choice is:

A) free of any political interaction or process.
B) by majority rule only.
C) one made through political interaction of many people according to established rules.
D) by unanimous consent only.

Question 31

A proposal to build new roads in a small town is up for a vote. Voter B estimates that his marginal benefit of roads at the proposed new level would be $80 per year. This voter will vote against the proposal:

A) no matter what her tax share.
B) if her tax share is $80.
C) if her tax share is less than $80.
D) if her tax share exceeds $80.

Question 32

Currently eight security guards patrol a condominium community each week. The number of guards has been determined by majority rule. Each voter pays a tax share of $50 per guard. If Voter M is the median voter,

A) his marginal benefit from security guards is $50.
B) his marginal benefit exceeds that of any other voter.
C) the difference between his marginal benefit and $50 is at a maximum.
D) he would be made better off if more security guards were hired per week.

Question 33

If all voters have single-peaked preferences for a pure public good, then the political equilibrium under majority rule:

A) cannot be defined.
B) is the median outcome.
C) is the median most-preferred outcome of all voter's voting.
D) will not change if tax shares change.

Question 34

Suppose tax shares are evenly distributed for a particular service at the amount of $100.00 per person. Which taxpayer suffers a political externality based on the taxpayer's marginal benefit for the service?

A) Taxpayer A has a marginal benefit of $100.00.
B) Taxpayer B has a marginal benefit of $200.00.
C) Taxpayer C has a marginal benefit of $90.00.
D) Taxpayers B and C.

Question 35

Implicit logrolling results when:

A) any two issues are paired on a ballot.
B) two voters succeed in pairing two issues on a ballot that can pass together but would fail indi?vidually.
C) voters agree to trade votes on an issue.
D) the pairing of two issues on a ballot allows the achievement of efficiency.

Question 36

Arrow's impossibility theorem states:

A) a unique political equilibrium for a public choice never exists.
B) a unique political equilibrium for a public choice cannot exist under majority rule.
C) a unique political equilibrium can exist if there is majority rule and multi-peaked preferences.
D) a unique political equilibrium for a public good cannot exist under unanimous consent.

Question 37

If the marginal social benefit of one more unit of a good is 10 and the marginal social cost of one more unit of a good is 11, then:

A) the output of the good is efficient.
B) a bureaucrat can still increase the bureau's budget.
C) a bureaucrat can increase the bureau's budget if the total social cost exceeds the total social benefit.
D) a bureaucrat can increase the bureau's budget if the total social cost is below the total social benefit.

Question 38

If a person has multiple-peaked preferences for a pure public good,

A) that person is always made worse off when moving away from his or her most-preferred polit?ical outcome.
B) that person will become worse off at first, but then become better off, when moving away from his or her most-preferred political equilibrium.
C) the marginal benefit of the pure public good always declines for that person as more is made available.
D) both b and c.

Question 39

If all voters have single-peaked preferences, then under majority rule:

A) cycling of political outcomes can occur.
B) a political equilibrium exists.
C) the political equilibrium is the median most-preferred outcome.
D) both b and c