Question 1

Special interest groups often engage in rent seeking, which is a socially wasteful activity.

Accepted Answer

Rent seeking refers to efforts by interest groups to influence public policy or government decisions in order to obtain benefits or advantages that have economic value. This can result in a misallocation of resources and a reduction in overall economic efficiency or social welfare. Thus, rent seeking is considered a socially wasteful activity.

Question 2

Public choice refers to

Accepted Answer

Public choice theory applies economic principles and analysis to understand how government decisions are made and how these decisions affect individuals and society as a whole. It involves studying the incentives, motivations, and behavior of politicians, bureaucrats, and voters in the political process.

Question 3

Simple majority voting will generate the same result whether taxes are equally divided or unequally divided.

Accepted Answer

Simple majority voting may lead to different outcomes depending on how taxes are divided because individuals' preferences and voting behaviors can change based on their perceived benefit or cost from the tax allocation.

Question 4

Public choice is concerned with

Accepted Answer

Public choice is a field of economics that analyzes how government decision-making is influenced by individuals and groups seeking to promote their own interests. It examines how politicians, bureaucrats, and voters behave and make decisions in the political process, and how this affects economic outcomes. Therefore, public choice is concerned with government decision-making, making option B) the correct choice.

Question 5

According to public choice theory, low voter turnouts may be the result of cost-benefit calculations on the part of voters.

Accepted Answer

Public choice theory suggests that individuals engage in rational cost-benefit analyses when deciding whether or not to vote. If the perceived benefits of voting (such as the impact on public policy or the satisfaction of civic duty) outweigh the perceived costs (such as time and effort to register and cast a ballot), then the individual is more likely to vote. Conversely, if the perceived costs outweigh the perceived benefits, then the individual may choose not to vote. Therefore, low voter turnout may be attributed in part to individuals deciding that the costs of voting outweigh the benefits.

Question 6

Rent seeking is more likely to occur in a family when the parents make their inheritance plans clear by telling the children ahead of time that their estate will be divided equally among the children (and that under no circumstances will the parents change their minds)than when there is more uncertainty with regards to the parents' inheritance plans.

Accepted Answer

The statement is not necessarily true. Rent seeking behavior can occur regardless of whether the parents' inheritance plans are clear or uncertain.

Question 7

People will be more likely to vote if they believe that their vote will determine the outcome of the election.

Accepted Answer

This is because if a person believes that their vote could potentially swing the election one way or the other, they are more likely to feel that their vote truly matters and can make a difference in the outcome. On the other hand, if someone does not believe that their vote will matter at all, they may be less likely to take the time and effort to go out and vote.

Question 8

It has been suggested by some economists that rent seeking activity often occurs within families, particularly when an inheritance is involved.

Accepted Answer

Some economists argue that family members may engage in rent seeking behavior when there is an inheritance involved, as they compete for a larger share of the inheritance rather than creating wealth through productive activity.

Question 9

Logrolling is the exchange of votes to gain support for legislation.

Accepted Answer

Logrolling is a common practice in legislative bodies where members agree to support each other's proposals or initiatives, usually to gain political or personal favors. It involves an exchange of votes or support to promote the interests of each member or group involved.

Question 10

Political candidates tend to identify themselves as being "middle-of-the-roaders", while they tend to label their opponents as a member of the political fringe.

Accepted Answer

Political candidates often want to appeal to a broad range of voters, which means positioning themselves as moderate or centrist. They may label their opponents as being too extreme or outside the mainstream in order to distance themselves and highlight their own perceived moderation.

Question 11

According to public choice theorists, people in the market sector and people in the public sector behave differently because

Accepted Answer

Public choice theorists argue that people in the market sector and people in the public sector behave differently due to the different institutional arrangements of the two sectors. The market sector operates in a competitive environment where firms are motivated by profit maximization, while the public sector operates in a non-competitive environment where government agencies may have different motivations, such as maximizing their budget or growing their bureaucracy. This institutional difference can lead to different behaviors and outcomes in the two sectors.

Question 12

Public choice deals exclusively with business decisions.

Accepted Answer

Public choice theory is a branch of economics that studies how individuals and groups make decisions in the public sector, including government organizations and agencies. While business decisions may sometimes be studied as a component of public choice theory, it is not the exclusive focus.

Question 13

Society as a whole is made worse off by rent seeking behavior by producers.

Accepted Answer

Rent seeking behavior refers to the actions of producers or individuals seeking to gain disproportionate or unfair benefits from government policies or regulations, rather than creating value through productive activity. Such behavior creates inefficiency, waste and distortion in the market, leading to higher prices and reduced competition. As a result, society as a whole is made worse off, as resources are diverted away from productive activities and towards rent seeking behaviors, ultimately reducing welfare and economic growth.

Question 14

In the early 19th century, the main lobbyists behind passage of the Factory Acts were the women and children who were being exploited.

Accepted Answer

The main lobbyists for the passage of the Factory Acts were not the women and children being exploited, but rather philanthropists, social reformers, and some members of the middle and upper classes who were concerned about the conditions in factories.

Question 15

Rational ignorance exists because voters are apathetic.

Accepted Answer

Rational ignorance occurs because the cost of becoming fully informed about a political issue outweighs the perceived benefit, not necessarily due to apathy.

Question 16

When a decision is made based on a simple majority vote it is possible for the total benefits to the community of this decision to be less than the total costs to the community of this decision.

Accepted Answer

A simple majority vote does not necessarily take into account the potential negative impacts or externalities that a decision may have on the community. It only considers the position held by the majority, which may not be the best decision for the overall well-being of the community.

Question 17

Most voters choose not to be informed about political and governmental issues because they are not smart enough to really understand the issues.

Accepted Answer

This statement is not true. Most voters choose not to be informed about political and governmental issues for a variety of reasons, including lack of time or interest, distrust of the media or political institutions, or feeling overwhelmed by the complexity of the issues. It is not fair or accurate to assume that voters are not smart enough to understand these issues.

Question 18

The voting outcome and the most preferred outcome of the median voter are the same in a simple majority vote where there are several options from which to choose.

Accepted Answer

In a simple majority vote, the option with the most votes wins. The median voter is the one whose preference is exactly in the middle of the range of preferences. If the median voter's preferred option has the most votes, then it will be the outcome of the vote. Therefore, the voting outcome and the most preferred outcome of the median voter will be the same.

Question 19

Under certain circumstances, a congressional district may be a special interest group.

Accepted Answer

If a congressional district advocates for a specific issue or policy that primarily benefits them, they may be considered a special interest group. This could potentially lead them to prioritize their own interests over the broader interests of the country.

Question 20

Simple majority rule will almost always generate efficient outcomes.

Accepted Answer

Simple majority rule can sometimes result in the tyranny of the majority, where the preferences of a minority group are ignored. This can lead to inefficient outcomes, particularly in cases where the minority group has valuable information or insights that could improve the decision-making process. Additionally, simple majority rule may not take into account the long-term consequences of a decision, leading to decisions that are efficient in the short term, but ultimately harmful in the long term.

Quiz 18: Public Choice and Special-Interest-Group Politics