Question 1

Demand-side market failures occur when

Accepted Answer

A)  demand curves don't reflect consumers' full willingness to pay for a good or service.
B)  demand curves don't reflect the full cost of producing a good or service.
C)  government imposes a tax on a good or service.
D)  a good or service is not produced because no one wants it.E) B) and C)
F) A) and D)

Question 2

Suppose that friends Jennifer, Stephanie, and Megan cannot agree on how much to spend for a bouquet of flowers to send to a person who allowed them to use her 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

Accepted Answer

A)  an inexpensive bouquet.
B)  a very expensive bouquet.
C)  a moderately priced bouquet.
D)  an expensive bouquet.E) A) and B)
F) B) and D)

Question 3

Unlike a private good, a public good

Accepted Answer

A)  has no opportunity costs.
B)  has benefits available to all, including nonpayers.
C)  produces no positive or negative externalities.
D)  is characterized by rivalry and excludability.E) A) and B)
F) A) and C)

Question 4

In the corporate world of business, the principal-agent problem arises between

Accepted Answer

A)  workers and managers.
B)  managers and stockholders.
C)  stockholders and bondholders.
D)  corporations and their banks.E) All of the above
F) A) and B)

Question 5

Problems with government decision making, politics, and elections are subjects that are studied in an area of economics called public

Accepted Answer

A)  finance.
B)  choice.
C)  policy.
D)  interest.E) C) and D)
F) A) and B)

Question 6

Location subsidies have been found to be largely a waste of taxpayer money.

Accepted Answer

A) True 
 B)False

Question 7

Public choice theorists contend that

Accepted Answer

A)  government can efficiently correct instances of market system failure.
B)  the existence of cost-benefit analysis has brought about the efficient use of resources in the public sector.
C)  public bureaucracies are inherently more efficient than private enterprises.
D)  public bureaucracies are inherently less efficient than private enterprises.E) None of the above
F) A) and D)

Question 8

"Government failure" is a prominent topic in

Accepted Answer

A)  public choice theory.
B)  Keynesian economics.
C)  socialist theory.
D)  behavioral economics.E) All of the above
F) A) and D)

Exam 5: Public Goods, Public Choice, and Government Failure

Problems with government decision making, politics, and elections are subjects that are studied in an area of economics called public

Correct Answer
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Correct Answer
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Public choice theorists contend that

Correct Answer
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Location subsidies have been found to be largely a waste of taxpayer money.

Correct Answer
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"Government failure" is a prominent topic in

Correct Answer
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In the corporate world of business, the principal-agent problem arises between

Correct Answer
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Demand-side market failures occur when

Correct Answer
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Unlike a private good, a public good

Correct Answer
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Exam 5: Public Goods, Public Choice, and Government Failure

Problems with government decision making, politics, and elections are subjects that are studied in an area of economics called public

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Public choice theorists contend that

Correct AnswerverifiedShow Answer

Location subsidies have been found to be largely a waste of taxpayer money.

Correct AnswerverifiedShow Answer

"Government failure" is a prominent topic in

Correct AnswerverifiedShow Answer

In the corporate world of business, the principal-agent problem arises between

Correct AnswerverifiedShow Answer

Demand-side market failures occur when

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Unlike a private good, a public good

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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