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

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Question 51

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Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $1,000. All five citizens will share an equal portion of this cost in taxes. The benefit of the public good is $220 to Abby, $210 to Ben, $210 to Clara, $180 to Joe, and $120 to Matt. In a majority vote, this proposal will most likely be

A) accepted, four in favor and one against.
B) defeated, one in favor and four against.
C) accepted, three in favor and two against.
D) defeated, two in favor and three against.

E) C) and D)
F) B) and C)

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Question 52

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The pursuit through government for special benefits at someone else's expense refers to

A) logrolling.
B) rent-seeking behavior.
C) the paradox of voting.
D) the median-voter model.

E) A) and B)
F) None of the above

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Question 53

Multiple Choice

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Lobbying actions that seek government legislation to provide tax breaks to specific organizations or industries would be an example of

Evaluate deregulation of an industry as an alternative to regulation.

How does government determine the optimal amount of a public good?

Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured.

Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed public good has a total cost of $1,000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $500 for Matt, $280 for Joe, and $260 for Teresa. In a majority vote, this proposal will most likely be

Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a jail and a stadium,

Nobody gains from pork-barrel politics other than the politicians.

Why do street performers face a free-rider problem? How do they try to reduce this problem?

New Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime control. This table shows the expected total annual costs and benefits of these alternatives. If New Normal University undertakes program Level Three,

Assume that a government is considering a new social program and may choose to include in this program one of four progressively larger projects. The marginal cost and the marginal benefits of each of the four projects are given in the table below. Suppose that the government chooses to do project C. What is the total cost and total benefit of doing project C?

Answer the question based on the following information for four highway programs of increasing scope. All figures are in millions of dollars. Based on the data, we can say that the marginal benefits of Program C are

The government receives all of the benefits associated with the production of a public good.

When a producer cannot get all consumers of their product to pay for enjoying it, such as in the case of a fireworks display, then we have a demand-side market failure.

Which of the following is related to the special-interest effect?

The political technique called logrolling

People enjoy outdoor holiday lighting displays and would be willing to pay to see them, but can't be made to pay. Because most people who put up lights are unable to charge others to view them, they don't put up as many lights as people would like. This is an example of a

Answer the question based on the following information for four highway programs of increasing scope. All figures are in millions of dollars. Based on the data, we can say that

Factors that impede the attainment of economic efficiency in the public sector are called