Question 1

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) :​

Accepted Answer

A)  private good.
B)  natural monopoly.
C)  open-access good.
D)  public good.
E)  quasi-private good.F) A) and D)
G) A) and E)

Question 2

Which of the following is an example of a good that is nonrival and nonexclusive in consumption?​

Accepted Answer

A)  Televisions
B)  Haircuts
C)  Pizza
D)  National defense
E)  Tickets to a rock concertF) D) and E)
G) B) and D)

Question 3

Generally, people are more satisfied with private market outcomes than with public voting outcomes because:​

Accepted Answer

A)  each consumer in the private market can choose the quantity he or she desires.
B)  the marginal utility of the last unit of private good is always positive.
C)  the prices of private goods are lower than those of public goods.
D)  the utility derived from the consumption of private goods is higher than that from public goods.
E)  there are too many choices to make in the public sector.F) B) and E)
G) All of the above

Question 4

Direct transfer programs:​

Accepted Answer

A)  are generally less efficient and less politically acceptable than subsidy programs.
B)  are generally more efficient and more politically acceptable than subsidy programs.
C)  are generally less efficient but more politically acceptable than subsidy programs.
D)  are generally more efficient but less politically acceptable than subsidy programs.
E)  are generally less efficient as they benefit only the large farmers.F) None of the above
G) D) and E)

Question 5

Rent-seeking activities by special interest groups result in:​

Accepted Answer

A)  greater economic activity by promoting efficiency in government.
B)  lower economic activity by diverting resources to less-productive or nonproductive uses.
C)  a more equal distribution of income and wealth in the nation.
D)  an increase in government revenue through an increase in taxes.
E)  greater efficiency in the private economy and increased wealth for society.F) A) and B)
G) None of the above

Question 6

Officials have estimated the size of the U.S. underground economy to be approximately _____ in 2012.​

Accepted Answer

A)  6 to 8 percent of GDP
B)  about $15 trillion
C)  1 percent of GDP
D)  $60-80 billion
E)  about $2 trillionF) B) and D)
G) C) and E)

Question 7

Traditional public-goods legislation usually has a negative impact on the economy.​

Accepted Answer

A) True 
 B)False

Question 8

The median-voter model attempts to explain why:​

Accepted Answer

A)  law partners seldom agree on the division of costs.
B)  the preferences of the typical voter often dominate other choices in a democracy.
C)  democracies evolve into dictatorships.
D)  people are largely oblivious to most public choices.
E)  resources employed to persuade government to redistribute income and wealth to special interests are unproductive.F) A) and E)
G) B) and E)

Question 9

When the support price for a good is higher than the market equilibrium price, _____.​

Accepted Answer

A)  resources tend to flow to their lowest-valued use
B)  the quantity of the good demanded by the consumers will increase
C)  producer surplus enjoyed by the suppliers will decrease in the short run
D)  the prices of specialized resources will decrease
E)  consumer surplus will decreaseF) A) and D)
G) A) and E)

Question 10

Which of the following federal budget allocations is an example of traditional public-goods legislation?​

Accepted Answer

A)  Funding for cancer research
B)  Funding for the construction of a statue in Alabama
C)  Provision of subsidies to wheat producers
D)  Dealing with labor union issues
E)  Implementation of tort reformsF) A) and D)
G) C) and D)

Question 11

A study found that privately operated juvenile correction facilities in Florida had _____ costs but experienced _____ rates of recidivism than state-operated juvenile corrections facilities.​

Accepted Answer

A)  lower, higher
B)  lower, lower
C)  higher, equivalent
D)  higher, lower
E)  lower, equivalentF) All of the above
G) None of the above

Question 12

Rent-seeking behavior imposes no costs on society.​

Accepted Answer

A) True 
 B)False

Question 13

Rent seeking is a zero-sum game because the public's loss is the rent seeker's gain.​

Accepted Answer

A) True 
 B)False

Question 14

Taxpayers and consumers end up paying for agricultural price supports.​

Accepted Answer

A) True 
 B)False

Question 15

The following graph shows the market for milk. Suppose the government introduces a variety of policies that set floor prices for milk at $3. Without government intervention, the market price of milk would average $2 per gallon for a market quantity of 100 million gallons per month. In the graph below, triangle abc represents the consumer surplus at the support price.​
​
Figure 16.1
​

Accepted Answer

A) True 
 B)False

Question 16

An underground economy grows more when:​

Accepted Answer

A)  government regulations increase.
B)  government regulations decrease.
C)  government corruption decreases.
D)  government spending increases.
E)  tax rate decreases.F) C) and D)
G) D) and E)

Question 17

Special-interest legislation generally leads to an increase in social welfare.​

Accepted Answer

A) True 
 B)False

Question 18

Filing a fraudulent income tax return that understates income or overstates deductions is known as:​

Accepted Answer

A)  tax evasion.
B)  logrolling.
C)  tax avoidance.
D)  rent seeking.
E)  profiteering.F) A) and B)
G) C) and D)

Question 19

Suppose the government of Marina decides to pay for public radio by taxing people on the basis of the number of hours they listen to it. In order to determine the tax, it decides to conduct a survey. However, if the survey is based on voluntary self-reporting, which of the following is likely to happen?​

Accepted Answer

A)  People who report many hours of listening may pay a small proportion of their income in public radio tax.
B)  Individuals with higher incomes may pay lower taxes than individuals with lower income.
C)  Many individuals may understate the number of hours they listen to public radio to government in order to reduce their tax bill.
D)  Many individuals may overstate the number of hours they listen to public radio to government in order to receive a lower tax bill.
E)  In order to evade taxes, individuals may shift from the formal, reported economy to an underground, "off the books" economy.F) B) and E)
G) A) and B)

Question 20

Which of the following is an example of populist legislation?​

Accepted Answer

A)  Legislation for the restoration of a historic theatre
B)  The government setting a floor price on milk
C)  Legislation for tort reforms
D)  The government providing agricultural subsidies to farmers
E)  Legislation for funding cancer researchF) C) and E)
G) A) and B)

Exam 16: Public Goods and Public Choice

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) :

Correct Answer
verified

An underground economy grows more when:

Correct Answer
verified

Correct Answer
verified

The median-voter model attempts to explain why:

Correct Answer
verified

Generally, people are more satisfied with private market outcomes than with public voting outcomes because:

Correct Answer
verified

A study found that privately operated juvenile correction facilities in Florida had _ costs but experienced _ rates of recidivism than state-operated juvenile corrections facilities.

Correct Answer
verified

Which of the following is an example of a good that is nonrival and nonexclusive in consumption?

Correct Answer
verified

Which of the following federal budget allocations is an example of traditional public-goods legislation?

Correct Answer
verified

Filing a fraudulent income tax return that understates income or overstates deductions is known as:

Correct Answer
verified

Officials have estimated the size of the U.S. underground economy to be approximately _____ in 2012.

Correct Answer
verified

When the support price for a good is higher than the market equilibrium price, _____.

Correct Answer
verified

Rent seeking is a zero-sum game because the public's loss is the rent seeker's gain.

Correct Answer
verified

Special-interest legislation generally leads to an increase in social welfare.

Correct Answer
verified

Which of the following is an example of populist legislation?

Correct Answer
verified

Rent-seeking behavior imposes no costs on society.

Correct Answer
verified

Rent-seeking activities by special interest groups result in:

Correct Answer
verified

Correct Answer
verified

Traditional public-goods legislation usually has a negative impact on the economy.

Correct Answer
verified

Direct transfer programs:

Correct Answer
verified

Taxpayers and consumers end up paying for agricultural price supports.

Correct Answer
verified

Exam 16: Public Goods and Public Choice

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) :​

Correct AnswerverifiedShow Answer

An underground economy grows more when:​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The median-voter model attempts to explain why:​

Correct AnswerverifiedShow Answer

Generally, people are more satisfied with private market outcomes than with public voting outcomes because:​

Correct AnswerverifiedShow Answer

A study found that privately operated juvenile correction facilities in Florida had _____ costs but experienced _____ rates of recidivism than state-operated juvenile corrections facilities.​

Correct AnswerverifiedShow Answer

Which of the following is an example of a good that is nonrival and nonexclusive in consumption?​

Correct AnswerverifiedShow Answer

Which of the following federal budget allocations is an example of traditional public-goods legislation?​

Correct AnswerverifiedShow Answer

Filing a fraudulent income tax return that understates income or overstates deductions is known as:​

Correct AnswerverifiedShow Answer

Officials have estimated the size of the U.S. underground economy to be approximately _____ in 2012.​

Correct AnswerverifiedShow Answer

When the support price for a good is higher than the market equilibrium price, _____.​

Correct AnswerverifiedShow Answer

Rent seeking is a zero-sum game because the public's loss is the rent seeker's gain.​

Correct AnswerverifiedShow Answer

Special-interest legislation generally leads to an increase in social welfare.​

Correct AnswerverifiedShow Answer

Which of the following is an example of populist legislation?​

Correct AnswerverifiedShow Answer

Rent-seeking behavior imposes no costs on society.​

Correct AnswerverifiedShow Answer

Rent-seeking activities by special interest groups result in:​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Traditional public-goods legislation usually has a negative impact on the economy.​

Correct AnswerverifiedShow Answer

Direct transfer programs:​

Correct AnswerverifiedShow Answer

Taxpayers and consumers end up paying for agricultural price supports.​

Correct AnswerverifiedShow Answer

A golf course or a swimming pool in a resort that is not crowded is an example of a(n) :

Correct Answer
verified

An underground economy grows more when:

Correct Answer
verified

Correct Answer
verified

The median-voter model attempts to explain why:

Correct Answer
verified

Generally, people are more satisfied with private market outcomes than with public voting outcomes because:

Correct Answer
verified

A study found that privately operated juvenile correction facilities in Florida had _ costs but experienced _ rates of recidivism than state-operated juvenile corrections facilities.

Correct Answer
verified

Which of the following is an example of a good that is nonrival and nonexclusive in consumption?

Correct Answer
verified

Which of the following federal budget allocations is an example of traditional public-goods legislation?

Correct Answer
verified

Filing a fraudulent income tax return that understates income or overstates deductions is known as:

Correct Answer
verified

Officials have estimated the size of the U.S. underground economy to be approximately _____ in 2012.

Correct Answer
verified

When the support price for a good is higher than the market equilibrium price, _____.

Correct Answer
verified

Rent seeking is a zero-sum game because the public's loss is the rent seeker's gain.

Correct Answer
verified

Special-interest legislation generally leads to an increase in social welfare.

Correct Answer
verified

Which of the following is an example of populist legislation?

Correct Answer
verified

Rent-seeking behavior imposes no costs on society.

Correct Answer
verified

Rent-seeking activities by special interest groups result in:

Correct Answer
verified

Correct Answer
verified

Traditional public-goods legislation usually has a negative impact on the economy.

Correct Answer
verified

Direct transfer programs:

Correct Answer
verified

Taxpayers and consumers end up paying for agricultural price supports.

Correct Answer
verified