Question 1

Self-interest theory of government

Accepted Answer

The self-interest theory of government explains why voters might establish explicit limits of government spending and taxes. This theory suggests that individuals act in their own self-interest and, therefore, voters will support policies that align with their preferences for government intervention and taxation levels. By establishing explicit limits on government spending and taxes, voters seek to protect their own financial interests and limit the power of the government to impose its will without their consent.

Question 2

The median-voter rule suggests that

Accepted Answer

The median-voter rule is a theory in political science that suggests politicians will try to adopt a position that reflects the preferences of the median voter. This is because politicians need to appeal to a majority of voters to win an election, and the median voter represents the midpoint of voter preferences. Therefore, politicians who adopt a position that reflects the preferences of the median voter are more likely to win elections. Option A is incorrect because the median-voter rule assumes that politicians will try to appeal to a majority of voters, not fool them. Option B is incorrect because the median-voter rule is based on individual politicians' decisions rather than how they vote collectively. Option D is incorrect because the median-voter rule is related to policy positions, not the distribution of government services.

Question 3

The government can offer a subsidy that encourages people to seek more education.

Accepted Answer

A government subsidy can be used to make education more affordable and accessible, which can encourage more people to pursue higher education. This can lead to a more educated and skilled workforce, which can have positive effects on the economy and society as a whole.

Question 4

Due to crime externalities,a more educated society tends to have a lower level of crime.

Accepted Answer

Crime externalities refer to the spillover effects of criminal activities on the society. A more educated society tends to have a better understanding of the potential consequences of criminal behavior and stronger norms against it, leading to a lower level of crime. In addition, education can provide individuals with skills and opportunities that reduce their likelihood of engaging in criminal activity. Therefore, a more educated society is likely to have a lower level of crime.

Question 5

The model of government based on small groups of people manipulating government for their own gain is

Accepted Answer

The model of government based on small groups of people manipulating government for their own gain is known as special-interest politics. This occurs when individuals or organizations work to persuade government officials to make decisions that benefit their own interests, often at the expense of the broader public.

Question 6

Why might a politician start a costly spending program if its costs exceed its social benefits?

Accepted Answer

The politician may engage in costly spending programs to gain prestige and support from voters who are not fully informed of the program's costs and benefits.

Question 7

Recall the Application about the benefits provided by the LoJack auto recovery system to answer the following question(s).
-Recall the Application.Who are the recipients of the external benefits generated by LoJack?

Accepted Answer

The owners of cars that do not have the LoJack system are the recipients of the external benefits generated by LoJack. This is because the presence of the LoJack system reduces the overall risk of auto theft, thereby lowering the number of cars stolen and reducing the overall cost of auto theft for society as a whole. This benefit is enjoyed by all car owners, not just those who purchase the LoJack system.

Question 8

List and explain some of the external benefits generated by education.

Accepted Answer

The answer of List and explain some of the external...

Question 9

Recall the Application about the value of trees in residential neighborhoods to answer the following question(s).
-According to the Application,a mature tree adds about ________ to the value of an owner's house and generates a total external benefit of $13,000 for neighboring houses.

Accepted Answer

According to the application, a mature tree adds about $7,000 to the value of an owner's house and generates a total external benefit of $13,000 for neighboring houses. Therefore, the best choice is C) $7,000.

Question 10

The purchase of fire extinguishers by apartment dwellers provides benefits to their neighbors.Explain why this situation leads to an inefficient outcome.

Accepted Answer

The answer of The purchase of fire extinguishers by apartment...

Question 11

Recall the Application about the benefits provided by the LoJack auto recovery system to answer the following question(s).
-Recall the Application.Which of the following is NOT a benefit from the LoJack system?

Accepted Answer

The LoJack system does not directly benefit or contribute to the hiring of more police personnel.

Question 12

The median voter group is

Accepted Answer

The median voter group refers to the large group of voters in the middle of the political spectrum, who are seen as holding the balance of power in elections. This group is not a special interest group and does not typically express their opinions through advertisements.

Question 13

In a two-party democratic system,individuals running for office typically

Accepted Answer

In a two-party democratic system, candidates typically appeal to the "middle-of-the-road" voters in society. These are the voters who may lean towards one party but are ultimately independent and can swing their vote either way. Appealing to this group can increase a candidate's chances of winning, as they are often the largest voting bloc. Appealing to extreme ideologies or the "right-wing" or "left-wing" voters may alienate moderate voters and ultimately hurt a candidate's chances of winning. Candidates do not necessarily aim to weaken the other party long term, as the goal is to win the current election. While telling the truth is important, it is not always the primary strategy for winning an election in a two-party system.

Question 14

If education results in external benefits,the government could subsidize education to lead the market to an inefficient level of output.

Accepted Answer

Subsidizing education to account for its external benefits actually moves the market closer to an efficient level of output by aligning private incentives with social benefits.

Question 15

Education produces only public benefits while costing society billions of dollars.

Accepted Answer

Education produces both public and private benefits, including increased earnings for individuals and economic growth for society, while the costs are an investment in future societal well-being and workforce development.

Question 16

Activities that provide external benefits

Accepted Answer

Activities that provide external benefits should be subsidized by the government to give decision makers an incentive to consider increasing their consumption. This helps to promote the efficient allocation of resources and encourages the production of goods and services that produce external benefits. Taxing them would make them more expensive and discourage people from consuming them. Simply ignoring the external benefits would result in an inefficient allocation of resources.

Question 17

The marginal social benefit of an activity equals its marginal private benefit plus its marginal external benefit.

Accepted Answer

This statement is true. The marginal social benefit of an activity takes into account not only the benefits experienced by the individual participating in the activity (marginal private benefit) but also any additional benefits that accrue to third parties outside of the transaction (marginal external benefit). By adding these two together, we get the total marginal social benefit of the activity.

Question 18

Public-choice economics is

Accepted Answer

Public-choice economics is the application of economic theory and methods to the study of how government decisions are made. It uses models of rational choice to analyze the incentives faced by politicians, bureaucrats, and other actors in the political process. Option A and B are incorrect, as they do not fully capture the meaning of public-choice economics. Option D is incorrect, as public-choice economics is a recognized field of study.

Question 19

Recall the Application about the value of trees in residential neighborhoods to answer the following question(s).
-Recall the Application.The benefits from planting trees in residential neighborhoods,including improved air quality and aesthetics,go to ________.This implies that trees provide both private and social benefits.

Accepted Answer

The application states that the benefits of planting trees in residential neighborhoods go to both the property owners and the neighbors. Therefore, both parties receive private and social benefits from the presence of trees.

Question 20

When there are external costs,the government can encourage people to take action that benefit other people.

Accepted Answer

The answer of When there are external costs,the government can...

Quiz 15: Public Goods and Public Choice