Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Which of the following statements would a public choice theorist be least likely
to agree with?
a. | The way to genuine reform in this country is to elect really good and moral people to
government. | b. | The people who work for a large government bureaucracy are fundamentally similar to
those who work for a private firm. | c. | A person's behavior is independent of the
institutional setting he or she finds himself in. | d. | The people who work for private firms are
inherently no better or worse than those who work for a large government
bureaucracy. |
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2.
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Public choice theory assumes that those involved in the public sector are
generally motivated by
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 |
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3.
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Rational ignorance occurs when
a. | voters find the cost of understanding a specific issue is greater than the expected
benefit | b. | legislation generates large benefits for a few people but imposes costs on many
people | c. | the preferences of the median voter dominates public choices | d. | individuals or firms
attempt to obtain favorable treatment from government officials | e. | people make public
decisions based on emotion rather than a rational analysis |
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4.
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When tobacco farmers in states such as Virginia try to influence legislators to
pass laws that are favorable to the tobacco industry, this is an example of a special-interest group
engaged in
a. | a zero-sum game | b. | profit maximization | c. | rent
seeking | d. | market exchange | e. | rational
ignorance |
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5.
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Special-interest legislation usually
a. | has widespread benefits and costs | b. | has concentrated benefits and
costs | c. | has concentrated benefits but widespread costs | d. | concerns the
provision of public goods | e. | concerns the provision of private
goods |
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6.
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Legislation that restricts imports of sugar and also provides subsidies to
producers of high-fructose corn syrup (a higher-cost substitute for cane sugar) is an example
of
a. | public-interest legislation | b. | competing-interest
legislation | c. | a positive-sum game | d. | special-interest
legislation | e. | concentrated-costs legislation |
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7.
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Special-interest groups
a. | often gain from public policies that may not be in accord with the interests of the
general public. | b. | never gain from public policies that are not in accord with the interests of the
general public. | c. | always gain from public policies that are not in accord with the interests of the
general public. | d. | never lobby for public policies that are not in accord with the interests of the
general public. | e. | always lobby for public policies that are not in accord with the interests of the
general public. |
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Situation 32-1
In the early 1980s, the U.S. automobile industry
managed to influence the government to negotiate with Japan a voluntary export restraint agreement
that was in effect from 1981 until 1985. The predictable result was an average increase in the price
of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import
quotas, 26,000 new jobs were "created" in the U.S. automobile industry.
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8.
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Refer to Situation 32-l. At the time the total yearly salary (including all the
benefits) of the average auto worker was no more than $50,000 per year, and the cost per job saved
was estimated at $160,000 per worker per year. We can conclude that
a. | import quotas are a cost-efficient way of saving jobs. | b. | the U.S. auto
industry, through its lobbying efforts, managed to promote the general public
interest. | c. | the net social benefits of import quotas were positive. | d. | all of the
above | e. | none of the above |
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9.
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Census data on the income distribution among families in the United States in
recent years shows
a. | a rising share earned by the top fifth and a declining share earned by the bottom
fifth | b. | a rising share earned by the bottom fifth and a declining share earned by the top
fifth | c. | both the share earned by the top fifth and the share earned by the bottom fifth
rising | d. | both the share earned by the top fifth and the share earned by the bottom fifth
falling | e. | falling total income in the top fifth |
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10.
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The distribution of income in the United States is
a. | more concentrated than the distribution of income in other developed countries
throughout the world | b. | significantly more even than the distribution
of income in other developed countries throughout the world | c. | quite similar to the
distribution of income in other developed countries throughout the world | d. | significantly less
even than the distribution of income in most developing countries | e. | quite similar to the
distribution of income in most developing countries |
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11.
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The government's provision of nonexcludable public goods such as national
defense is accepted because
a. | government is more efficient than private firms at producing
goods. | b. | the market fails to produce nonexcludable public goods as a result of the free-rider
problem. | c. | people do not value public goods such as national defense very
highly. | d. | a and c | e. | all of the
above |
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