Question 1

In which case is the political process most likely to result in the acceptance of efficient projects and rejection of inefficient projects?

Accepted Answer

The answer of In which case is the political process...

Question 2

If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from

Accepted Answer

The potato farmers who own the land to be irrigated would likely have the most active support for the project as it directly benefits them and would increase their crop yield. The other options may also support the project, but their support would not be as strong or direct.

Question 3

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Accepted Answer

Agricultural interests lobby for higher farm subsidies and price supports in order to seek a redistribution of income favoring themselves. These subsidies and price supports benefit farmers by keeping prices artificially high, giving them a larger share of the market and profits.

Question 4

When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the

Accepted Answer

This scenario is an example of the special-interest effect, where politicians create policies that cater to the interests of small, organized groups, such as farmers, instead of addressing the needs of larger, unorganized groups, such as taxpayers or consumers. The result is that the small interest group benefits at the expense of the larger group, leading to an unequal distribution of resources and negative consequences for society overall.

Question 5

Which of the following increases the political power of special interest groups and makes counterproductive government action more likely?

Accepted Answer

The answer of Which of the following increases the political...

Question 6

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Accepted Answer

Restrictions on sugar imports, subsidies for sports stadiums, and federal spending on an indoor rain forest in Iowa all benefit specific special interests, rather than promoting the general welfare. These types of programs often reflect the political interests of well-connected groups rather than being based on careful analysis of the benefits relative to costs, or designed to redistribute income from the rich to the poor.

Question 7

For activities in which the benefits are concentrated and the costs widespread, governments are likely to undertake

Accepted Answer

The answer of For activities in which the benefits are...

Question 8

A special-interest issue is one that

Accepted Answer

A special-interest issue is one that benefits a small, well-organized interest group at the expense of taxpayers or consumers. This means that the cost of the program is imposed on everyone, even if they do not directly benefit from it, while the benefits accrue only to a small group. Examples of special-interest issues include subsidies for particular industries or tariffs on imported goods that protect domestic producers but raise prices for consumers.

Question 9

A local government operates a city recreation center with a pool and tennis courts. The center is financed through $50 annual membership fees (required for members to use it). This type of financing is an example of a

Accepted Answer

The $50 annual membership fee is a user charge, which is a fee paid by those who use a specific government service or facility. It is different from a head tax (a flat fee paid by all residents regardless of use), an excise fee (a tax on a specific good or service), and a progressive tax (a tax that increases as income increases).

Question 10

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a

Accepted Answer

A special-interest issue benefits a small group, usually a specific industry or interest group, while imposing costs on the general public or society as a whole. This is often done through lobbying efforts and political influence, and can result in policies that are not in the best interest of the majority.

Question 11

Other things constant, if both the benefits and costs of a public-sector activity are widespread among voters, the political process will generally result in the

Accepted Answer

If both the benefits and costs are widespread among voters, the political process is more likely to result in a rational decision-making process that weighs the benefits against the costs. Therefore, productive activities with clear benefits and lower costs are more likely to be accepted, while unproductive activities with unclear benefits and higher costs are more likely to be rejected.

Question 12

Which of the following is the most likely explanation for the imposition of a price floor in the market for corn?

Accepted Answer

A price floor benefits sellers by increasing the price they receive for their product. Therefore, sellers of corn are the most likely group to pressure policymakers into enacting a price floor.

Question 13

In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources?

Accepted Answer

The answer of In which of the following situations is...

Question 14

In which one of the following situations is the political process most likely to result in both the acceptance of efficient (productive) programs and the rejection of inefficient (counterproductive) political activities?

Accepted Answer

When the people who benefit from a government program pay the costs of the program roughly in proportion to the benefits, there is a direct and visible incentive for voters to support efficient programs and reject inefficient ones. In this situation, voters are more likely to hold their representatives accountable for enacting programs that are both productive and cost-effective.

Question 15

Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?

Accepted Answer

User charges directly link the cost of a government program or service to the individuals who use it. This creates a more direct relationship between voter benefits and costs, leading to greater efficiency in government programs. The other options may have varying effects on different voters, making it harder to establish a clear relationship between benefits and costs.

Question 16

In which of the following situations is representative democracy most likely to lead to the adoption of an inefficient government program?

Accepted Answer

In a representative democracy, politicians are incentivized to cater to the interests of their constituents, particularly those who are most active and vocal in advocating for their own interests. In the case of a program that provides substantial benefits to a small interest group (e.g. a particular industry), politicians may prioritize the interests of that group over the larger public interest, as the costs of the program are dispersed among the broader population and therefore may not be as politically salient. This could lead to the adoption of an inefficient government program that benefits a small group at the expense of the larger population.

Question 17

Special-interest legislation is characterized by

Accepted Answer

Special-interest legislation refers to laws or policies that benefit a specific group or industry at the expense of the general public. It typically results in concentrated benefits for the targeted group, while the costs are spread out among the rest of the population. This is why choice B, which describes concentrated benefits and widespread costs, is the best answer.

Question 18

Government action will often result in the counterproductive use of resources because

Accepted Answer

Politicians may prioritize policies that are more likely to help them win elections, rather than those that are most efficient or effective. This can result in the allocation of resources to politically popular but not necessarily productive programs.

Question 19

Under democratic representative government, spending on a government program will likely be larger than the amount consistent with economic efficiency when

Accepted Answer

The answer of Under democratic representative government, spending on a...

Question 20

According to economic theory, it is often rational for a politician to support special interest groups at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers)

Accepted Answer

When nonspecial-interest voters are unconcerned or uninformed about the issue and campaign funds are readily available from the special interest group, it becomes rational for a politician to support special interest groups. This is because the politician can benefit from the financial support of the special interest group without facing any significant opposition from non-special-interest voters.

Quiz 6: The Economics of Political Action