1. Public choice theory indicates the behavior of people
a. differs from the behavior of people in the market sector because the latter are motivated by self-interest, whereas, the former are motivated by the public interest.
b. differs from the behavior of people in the market because public sector decision roles do not allow people to pursue their own self-interests.
c. is the same as people in the market sector only if decisions are made by majority vote.
d. is best understood by applying the same principles we use to predict the behavior of people in the market sector.
2. The rational ignorance effect is a result of
a. externalities that lead to an excess supply of information.
b. the limited incentive of the news media to cover political campaigns.
c. the cost of information and the expectation of individual voters that their vote will not be decisive.
d. The lack of a college education on the part of most voters in the United States.
3. A labor lawyer who lobbies for legislation requiring
lengthy contracts between employers and employees (that require both parties
to hire lawyers) is engaging in
a. an activity necessarily promoting the public good.
b. rent seeking.
c. internalization of an externality.
d. an illegal act.
4. Which of the following provides the best summary of
the basic idea of public choice analysis?
a. Public choice analysis applies the principles of economics to political science topics.
b. Public choice analysis takes the principles of political science and applies them to the traditional topics of economics.
c. Public choice analysis uses the principle of majority rule to determine the efficiency of an action.
d. Public choice analysis indicates there is a sharp distinction between economic and political topics.
5. According to the special-interest effect, which of
the following groups is least likely to have a significant influence on
the political process?
a. the American Federation of Labor
b. the National Association of Manufacturers
c. nonunion employees
d. the American Medical Association
6. Legislators have a strong incentive to:
a. work with special-interest groups that may make campaign contributions.
b. conceal the true costs of favored projects from voters
c. exaggerate the benefits of favored projects to voters.
d. do all of the above.
7. Most voters will likely be concerned with
a. most issues since most issues have some impact, however slight, on each citizen.
b. only a few special issues (those that exert the most impact on the voters' personal welfare).
c. most issues since information on most issues can be obtained at a low cost.
d. the views of a particular political candidate on all issues.
8. Public choice theory suggests political entrepreneurs
will be most likely to favor redistribution of income from
a. the rich to the poor.
b. unorganized taxpayers to well-organized interest groups.
c. middle-income taxpayers to both the rich and the poor.
d. well-organized businesses and labor groups to consumers.
9. Garbage removal is provided by different kinds of organizations.
If a newly developed truck has just come on the market, and managers in
all garbage-removal organizations are analyzing the net benefits of buying
it, which of the following groups will most likely undertake the most serious,
painstaking examination and adopt the new truck quickly if it effectively
a. managers of city-owned garbage agencies
b. elected officials in cities where government provides the garbage removal services
c. owner/managers of private garbage removal companies operating in a competitive environment
d. the mayors of large cities
10. Which of the following factors weakens the case for
public-sector provision of goods and services?
a. the shortsightedness effect
c. the special-interest effect
d. both a and c