Chapter 05 Government's Role and Government Failure Answer Key
Multiple Choice Questions
1.
Which of the following is a key difference between the economic activities of government
and those of private firms?
AACSB: Reflective Thinking
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Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
2.
Which of the following is an activity of government that is not an activity of private firms?
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Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
3.
The government's ability to coerce can enhance economic efficiency by:
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Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
4.
In a market economy, the government's power to coerce can:
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
5.
How does government's power to coerce behavior tend to reduce private-sector risk?
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
6.
Weak government enforcement of contracts and laws tends to:
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
7.
The government of Southland wants to improve resource allocation in the country. Which
of the following actions by the Southland government is most likely to accomplish this?
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
8.
Which of the following is a source of government failure?
AACSB: Reflective Thinking
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Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
9.
Information problems create inefficient outcomes in:
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
10.
The many layers of the federal government in the United States:
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
11.
In what way, if any, does the invisible hand affect government resource allocation?
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
12.
Individual accountability within the government bureaucracy:
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
13.
Government officials tend to make:
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
14.
As it relates to corporations, the principal-agent problem is that:
AACSB: Analytic
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
15.
In corporations, owners are __________________ and managers are ________________.
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
16.
In representative democracy, voters are ____________ and politicians are ______________.
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
17.
As it relates to owners and managers, the principal-agent problem results from the:
AACSB: Reflective Thinking
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
18.
As it relates to the political process, the principal-agent problem results from the:
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
19.
"Vote for my special local project and I will vote for yours." This political technique:
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
20.
Factors that impede the attainment of economic efficiency in the public sector are called:
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
21.
The idea of government failure includes all of the following
except
:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
22.
Suppose American winemakers convince the federal government to issue a directive to
serve only domestically produced wine at government functions. This would be an example
of:
AACSB: Reflective Thinking
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
23.
Public choice theorists contend that:
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Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
24.
The pursuit through government of a "transfer of wealth" at someone else's expense
refers to:
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
25.
Economists call the pursuit of a transfer of wealth through government at someone else's
expense:
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
26.
Public choice economists hold that politicians will:
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Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
27.
Public choice economists contend public bureaucracies are inefficient primarily because:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
28.
A special-interest issue is one whose passage yields:
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
29.
The political tendency to favor spending priorities with immediate benefits but deferred
costs results in:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
30.
Government's unfunded liabilities:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
31.
The U.S. federal government's largest unfunded liability is:
AACSB: Reflective Thinking
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
32.
Chronic budget deficits can be attributed to:
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
33.
Which of the following impacts would economists expect to result from chronic budget
deficits?
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
34.
The estimated value of the U.S. government's unfunded liability to Social Security is:
AACSB: Reflective Thinking
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
35.
Government changes in interest rates to regulate the economy are part of:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
36.
Government fiscal policy involves changing which of the following?
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
37.
To curb the problem of voters wanting immediate benefits and deferred costs, many state
governments in the United States have:
AACSB: Reflective Thinking
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
38.
A government using fiscal policy in an attempt to stimulate the economy would do which
of the following?
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
39.
To reduce politicization of policy making, many countries have given control of ________ to
politically independent central banks.
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
40.
The U.S. Federal Reserve, the Bank of Japan, the Bank of England, and the European
Central Bank are all in charge of what for the countries they represent?
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
41.
Monetary stimulus is only helpful to an economy:
AACSB: Analytic
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
42.
When a nation is in a debt crisis, the government's level of debt is so high that:
AACSB: Reflective Thinking
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
43.
Public choice theorists point out that the political process:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
44.
When congressional representatives vote on an appropriations bill, they must vote yea or
nay, taking the bad with the good. This statement best reflects the:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
45.
Suppose lawyers seek legislation to limit the use of computer software that enables
people to use their personal computers to self-prepare their own wills, trusts, and other
legal documents. This is an example of:
AACSB: Reflective Thinking
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Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
46.
In a sporting goods store, you can buy the equipment you want and forgo the rest. But in
an election you "buy" the entire range of the candidate's positions, including some you
may not agree with. This difference:
AACSB: Reflective Thinking
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
47.
According to some economists, the private sector is more efficient than the public sector
mainly because:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
48.
In 2012, the U.S. federal government legislation authorized:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
49.
Narrow, specifically designated expenditures that are included in more comprehensive
legislation are known as:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
50.
"Earmarks" refer to:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
51.
Regulatory capture is said to have occurred when which of the following is true?
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
52.
Which of the following would be the best example of regulatory capture?
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
53.
Regulatory capture often occurs because of which of the following?
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
54.
Which of the following is considered a potential solution to some regulatory capture?
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
55.
Proponents of deregulation point to all of the following industries as examples of
successful deregulation
except
for:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
56.
Which of the following would best explain why regulatory capture is a problem?
AACSB: Analytic
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Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
57.
Deregulation:
AACSB: Analytic
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
58.
Government loan guarantees tend to have the effect of:
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
59.
Under what circumstances would government loan guarantees be socially beneficial?
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
60.
Which of the following will tend to socialize losses and privatize gains?
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
61.
What is the main problem with government guarantees that socialize losses and privatize
gains?
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
62.
The unlawful misdirection of governmental resources for personal gain is known as:
AACSB: Analytic
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
63.
The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and
Senator Sly helps pass legislation to add more jogging paths across the state. From this
we can definitively conclude:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
64.
Political corruption occurs whenever:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
65.
(Consider This) From an economist's perspective:
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
66.
(Consider This) From an economist's perspective, when is government too big?
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Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
67.
(Consider This) Subsidies for mohair production illustrate:
AACSB: Reflective Thinking
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Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
68.
(Consider This) Smaller groups are sometimes able to achieve political victories against
larger groups. This is referred to as the:
AACSB: Analytic
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
69.
(Consider This) The collective action problem refers to:
AACSB: Analytic
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
70.
(Consider This) Unintended consequences leading to inefficient outcomes are more likely
with government programs than in the private sector because:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
71.
(Consider This) Government passes a law requiring all domestic clothing factories to pay
workers at least $20 per hour. As a result, domestic clothing companies move their
operations overseas, leaving domestic workers unemployed. This situation illustrates the
problem of:
AACSB: Analytic
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Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
72.
(Last Word) In 2011, Congress funded a sanctuary for white squirrels, a giant roadside
coffee pot, and an antique bicycle museum. This is an example of:
AACSB: Reflective Thinking
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Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
73.
(Last Word) In their effort to provide disaster relief after Hurricane Katrina, the Federal
Emergency Management Agency (FEMA) made payouts on as many as 900,000 claims
with invalid Social Security numbers or false names and addresses. This example
illustrates:
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Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
74.
(Last Word) In 2004, Congress passed a corporate tax relief bill with 276 provisions for tax
breaks to groups such as restaurant owners, Hollywood producers, and NASCAR track
owners. This is an example of the:
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
True / False Questions
75.
The government's ability to force people to do things can increase economic efficiency.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
76.
Government's ability to enforce laws and contracts increases private-sector economic
risks.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
77.
The invisible hand guides government's economic activity just as it does with private
economic activity.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
78.
Because of the force of law and bureaucratic structure, government accountability is less
of a problem than in the private sector.
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
79.
The size and scope of government inhibit the flow of information to decision makers,
leading to inefficient outcomes.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how government's power to coerce can be economically beneficial and list some of
the difficulties associated with managing and directing the government.
Topic: Government's economic role
80.
The pursuit through government of a transfer of wealth at society's expense is called "rent
seeking."
AACSB: Analytic
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
81.
The principal-agent problem is a problem for the private sector but does not apply to
political decision making.
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
82.
Medicare is the U.S. government's largest unfunded liability.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
83.
A debt crisis refers to how much government spending exceeds tax revenues in a given
year.
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
84.
Fiscal policy is more susceptible to politicization than monetary policy.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
85.
Changes in tax rates are a form of monetary policy.
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
86.
Monetary policy attempts to change the level of spending by altering interest rates.
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Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
87.
The problem of limited and bundled choices explains why many voters cannot fully express
their political preferences.
AACSB: Reflective Thinking
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Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
88.
Regulatory capture occurs when government exerts excessive control over an industry.
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
89.
The Securities and Exchange Commission's supervision of Wall Street financial firms is a
possible example of regulatory capture.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
90.
Economists widely support deregulation of industries that tend toward monopoly or
generate substantial negative externalities.
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
91.
Deregulation is seen as a solution to regulatory capture because it eliminates the
regulatory agency that can or has been captured.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
92.
Government loan guarantees tend to socialize gains and privatize losses.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
93.
Government guarantees that socialize losses and privatize gains tend to encourage risky
and imprudent investment.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Discuss "government failure" and explain why it happens.
Topic: Government failure
Multiple Choice Questions
94.
The field of economics that analyzes government decision making, politics, and elections
is called:
AACSB: Analytic
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Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
95.
Public choice economists:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
96.
Which one of the following topics would be of the most interest to a public choice
economist?
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
97.
An economic analysis of the relationship between proposed legislation affecting major
employers in each state and the voting patterns of senators and representatives in
Congress on that legislation would fit within the subcategory of economics called:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
98.
"Government failure" is a prominent topic in:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
99.
Public choice theory focuses on the economics of:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Public choice theory
100.
Because majority voting fails to incorporate the strength of the preferences of individual
voters, it:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
101.
Suppose that Katie and Kelly each expects to receive $500 worth of marginal benefits
from a proposed new recreation center, whereas Kerry expects to receive only $100 worth.
If the proposed tax levied on each for the center would be $400, a majority vote will:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
102.
Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed
new park, whereas Elizabeth perceives $800. If the proposed tax levied on each for the
park would be $300, a majority vote will:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
103.
Answer the question on the basis of this table showing the marginal benefit that a
particular public project will provide to each of the three members of a community. No
vote trading is allowed.
If the tax cost of this proposed project is $600 per person, a majority vote will:
AACSB: Analytic
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
104.
Answer the question on the basis of this table showing the marginal benefit that a
particular public project will provide to each of the three members of a community. No
vote trading is allowed.
If the tax cost of this proposed project is $300 per person, a majority vote will:
AACSB: Analytic
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
105.
Answer the question on the basis of this table showing the marginal benefit a particular
public project will provide to each of the three members of a community. No vote trading is
allowed.
If the tax cost of this proposed project is $600 per person, a majority vote will:
AACSB: Analytic
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
106.
The political technique called logrolling:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
107.
The trading of votes by elected officials to secure favorable outcomes is called:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
108.
Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for
Senator A's state project. This is an example of:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
109.
A situation in which society may not be able to rank its preferences consistently through
paired-choice majority voting refers to:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
110.
The principle that under some circumstances majority voting fails to make consistent
choices reflecting the community's underlying preference is best demonstrated by the:
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
111.
According to the paradox of voting:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
112.
Suppose that in a series of paired-choice votes a new park is preferred to a new
recreation center and a new recreation center is preferred to street widening. Also
suppose that street widening is preferred to a new park. This set of votes is an example of
the:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
113.
Refer to the table. In a choice between the highway and the lighthouse:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
114.
Refer to the table. The inconsistency illustrated by the table is that, while a majority of
voters prefer the:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
115.
The information contained in the table illustrates:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
116.
Refer to the table. In a choice between public safety and parks:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
117.
Refer to the table. In a choice between parks and education:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
118.
Refer to the table. In a choice between education and public safety:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
119.
Refer to the table. The outcomes of the three possible sets of paired-choice majority votes
illustrate the:
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
120.
The median-voter model implies that:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
121.
The median-voter model implies that a political office seeker will:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
122.
Answer the question on the basis of the following table that shows the total costs and
total benefits facing a city of five different potential baseball stadiums of increasing size.
All figures are in millions of dollars.
Refer to the table. Suppose a five-person city council must decide via majority voting
which of these stadiums to build. Also suppose that each of the stadium sizes has the
support of one council member. According to the median voter model, the council will
ultimately vote in favor of stadium:
AACSB: Analytic
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
123.
Answer the question on the basis of the following table that shows the total costs and
total benefits facing a city of five different potential baseball stadiums of increasing size.
All figures are in millions of dollars.
Refer to the table. The marginal cost and marginal benefit of stadium B (relative to A) are:
AACSB: Analytic
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
124.
Answer the question on the basis of the following table that shows the total costs and
total benefits facing a city of five different potential baseball stadiums of increasing size.
All figures are in millions of dollars.
Refer to the table. Based on cost-benefit analysis, the city should:
AACSB: Analytic
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
125.
Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for
a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants
a super-large pizza. Assuming no paradox of voting, majority voting will result in a decision
to order:
A.
a medium pizza.
B.
a large pizza.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
126.
Some people argue that the three main television networks all have similar programming.
If true, this observation might best be explained by the:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
127.
Suppose that friends Jennifer, Stephanie, and Megan cannot agree on how much to spend
for a bouquet of flowers to send to a person that allowed them to use their beach house
for the weekend. Jennifer wants to buy a moderately priced bouquet, Stephanie wants to
buy an expensive bouquet, and Megan wants to buy a very expensive bouquet. Assuming
no paradox of voting, majority voting will result in the decision to buy:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
128.
Suppose a college economics department decides to use a single economics text for all
sections of principles of economics. Also assume that the three individual members of the
textbook selection committee have the following preferences.
Assuming all other textbook qualities except analytical level are the same, paired-choice
majority voting will result in the committee:
AACSB: Reflective Thinking
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
Type: Table
129.
"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout
numerous states often reflects:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
130.
(Consider This) Voter failure describes the situation where:
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
131.
(Consider This) Which of the following is an example of voter failure?
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
True / False Questions
132.
Logrolling can either increase or diminish economic efficiency.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
133.
Even if a majority of the population wants a law and the law is passed, the outcome may
still be economically inefficient.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
134.
The paradox of voting is that under majority voting rules the median voter decides the
election outcome.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting
135.
Majority voting assures that government will provide a public good if it yields total benefits
in excess of total costs.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 (Appendix) Explain the difficulties of conveying economic preferences through majority voting.
Topic: Revealing preferences through majority voting