Question 1

Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed new park,whereas Elizabeth perceives $800.If the proposed tax levied on each for the park would be $300,a majority vote will:

Accepted Answer

Since the perceived marginal benefit of the proposed park is less than the tax levied on each person, the majority vote will likely defeat the project. This means that resources will be underallocated to the park, as it will not be built even though it would provide a positive net benefit to society. This is the case because the cost of the project (the tax) exceeds the perceived marginal benefit of the individual citizens.

Question 2

The median-voter model implies that:

Accepted Answer

The median-voter model suggests that political outcomes will often reflect the preferences of the median voter, which can lead to dissatisfaction among those whose preferences are not aligned with the median, hence many people may be dissatisfied with the size of government in the economy.

Question 3

An economic analysis of the relationship between proposed legislation affecting major employers in each state and the voting patterns of senators and representatives in Congress on that legislation would fit within the subcategory of economics called:

Accepted Answer

Public choice theory focuses on how individuals and groups make decisions within the political process, including how legislators vote on proposed legislation. This analysis would fall within the realm of public choice theory.

Question 4

Public choice theory focuses on the economics of:

Accepted Answer

Public choice theory focuses on the economic analysis of government decision making, politics, and elections. It assumes that politicians and bureaucrats are self-interested individuals, just like those in the private sector, and that they respond to incentives in similar ways. It also examines the effects of different voting systems and electoral rules on political outcomes.

Question 5

Which one of the following topics would be of the most interest to a public choice economist?

Accepted Answer

Public choice economists study how individuals and groups make decisions in the political process, and rent-seeking behavior is a major topic in this field. Rent-seeking refers to individuals or groups using their resources to obtain benefits from the government through political means, rather than through productive activities in the market. This behavior can lead to inefficiencies, corruption, and economic distortion, making it an important area of study for public choice economists. The other topics listed are more closely related to microeconomics or macroeconomics, and may be of interest to economists in those fields.

Question 6

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project.This is an example of:

Accepted Answer

This is an example of logrolling, which is the practice of exchanging favors, especially in politics by reciprocal voting for each other's proposed legislation.

Question 7

Suppose that Katie and Kelly each expects to receive $500 worth of marginal benefits from a proposed new recreation center,whereas Kerry expects to receive only $100 worth.If the proposed tax levied on each for the center would be $400,a majority vote will:

Accepted Answer

The answer of Suppose that Katie and Kelly each expects...

Question 8

The political technique called logrolling:

Accepted Answer

Logrolling involves the practice of exchanging favors or trading votes to secure favorable outcomes that otherwise could be rejected. It is a political technique where members of a legislative body trade their support for one another's proposed laws. It may result in passing laws that are not economically efficient or even desirable, but are passed due to political bargaining rather than sound policy analysis.

Question 9

Answer the question on the basis of this table showing the marginal benefit a particular public project will provide to each of the three members of a community.No vote trading is allowed. 
If the tax cost of this proposed project is $600 per person,a majority vote will:

Accepted Answer

The answer of Answer the question on the basis of...

Question 10

According to the paradox of voting:

Accepted Answer

The paradox of voting suggests that majority voting may fail under certain circumstances to effectively represent and reflect the community's underlying preferences. Consequently, option D is the best choice as it captures the essence of the paradox of voting. Option A describes the concept of the Samuelson condition for the provision of public goods, which is unrelated to the paradox of voting. Option B describes the impact of vote trading on economic efficiency, which is not necessarily related to the paradox of voting. Option C describes the concept of the median voter theorem, which is also unrelated to the paradox of voting.

Question 11

Because majority voting fails to incorporate the strength of the preferences of individual voters,it:

Accepted Answer

Majority voting can lead to economically inefficient outcomes because it does not take into account the intensity of preferences or the trade-offs that voters may be willing to make. This can result in a choice that is not the most preferred by the majority of voters, but rather one that is simply preferred by a larger number of voters. This is known as the tyranny of the majority.

Question 12

The principle that under some circumstances majority voting fails to make consistent choices reflecting the community's underlying preference is best demonstrated by the:

Accepted Answer

The paradox of voting is the principle that under some circumstances, when three or more options are voted on, no single option can gather a majority of votes, even when one option is preferred by a majority of voters. This demonstrates that majority voting may not always accurately reflect the community's underlying preference.

Question 13

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community.No vote trading is allowed. 
If the tax cost of this proposed project is $300 per person,a majority vote will:

Accepted Answer

The answer of Answer the question on the basis of...

Question 14

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community.No vote trading is allowed. 
If the tax cost of this proposed project is $600 per person,a majority vote will:

Accepted Answer

The marginal benefit for each member of the community is less than $600, which means that the cost of the project outweighs the benefits. Therefore, a rational voter should vote against the project, resulting in its defeat and an allocation of resources that is efficient.

Question 15

Answer the question on the basis of the following table that shows the total costs and total benefits facing a city of five different potential baseball stadiums of increasing size.All figures are in millions of dollars. 
Refer to the table.The marginal cost and marginal benefit of stadium B (relative to A)are:

Accepted Answer

The marginal cost of stadium B relative to A is $100 million - $80 million = $20 million. The marginal benefit of stadium B relative to A is $200 million - $140 million = $60 million. Therefore, the best choice would be to build stadium B as it provides a positive net benefit ($60 million - $20 million = $40 million) compared to all other stadiums.

Question 16

A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to:

Accepted Answer

The paradox of voting refers to the situation where society may not be able to rank its preferences consistently through paired-choice majority voting. This happens when there are more than two options, and each option has supporters and opponents. In such a situation, it is possible that no option will receive a majority of votes, or that a cyclical preference will emerge. For example, if there are three options, A, B, and C, and a majority prefers A to B, B to C, and C to A, then there is no consistent ranking of preferences. This paradox highlights the limitations of democratic decision-making and the need for alternative methods of collective decision-making.

Question 17

Suppose that in a series of paired-choice votes a new park is preferred to a new recreation center and a new recreation center is preferred to street widening.Also suppose that street widening is preferred to a new park.This set of votes is an example of the:

Accepted Answer

This scenario is an example of the paradox of voting, also known as Condorcet's Paradox, which occurs when collective preferences are cyclic (i.e., non-transitive) despite the individual preferences being perfectly rational and transitive. This means that the group's preferences can loop in a way that no option is the definitive winner when compared pairwise, as shown by the preference cycle: park > recreation center > street widening > park.

Question 18

The trading of votes by elected officials to secure favorable outcomes is called:

Accepted Answer

Logrolling is the practice of exchanging favors, especially in politics, by reciprocal voting for each other's proposed legislation.

Question 19

Government failure is a prominent topic in:

Accepted Answer

Government failure is a core concept in public choice theory, which focuses on how political decisions are made and how they affect individuals and society as a whole. The theory suggests that government failure occurs when government officials make decisions that do not maximize social welfare, and instead serve their own interests or the interests of special interest groups.

Question 20

The median-voter model implies that a political office seeker will:

Accepted Answer

The median-voter model suggests that during primary elections, candidates may adopt more extreme positions to appeal to their party's base. However, in general elections, they tend to moderate their views to attract the median voter, who is typically more centrist. This is because the primary electorate is often more ideologically extreme than the general electorate.

Quiz 5: Governments Role and Government Failure