Deck 6: Nonmarket Analysis for Business

Question 1

The distributive politics spreadsheet is used as a substitute for the analysis of benefits and costs of nonmarket action.

Answer 1

False

Question 2

The greater the number of members of an interest group, the greater its potential effectiveness, but the cost of organizing and mobilizing those members can be high.

Answer 2

True

Question 3

The supply side information summarized in the distributive politics spreadsheet for each interest includes the available substitutes, the aggregate benefits, and the per capita benefits for individual members of the interest group.

Answer 3

False

Question 4

From the perspective of structural pluralism-threat of legislation and regulation are considered as principal drivers of public policies.

Question 5

The size of the interest group determines the demand for nonmarket action.

Question 6

The effectiveness of nonmarket action is dependent on the resources available to the interest groups.

Question 7

The greater the coverage by the members of an interest group, the less effective is its nonmarket action.

Question 8

If the aggregate benefits for an interest are widely distributed rather than concentrated, the per capita benefits can be small, providing little incentive for nonmarket action.

Question 9

The effectiveness of nonmarket action is independent of the cost of organizing individuals and organizations with aligned interests.

Question 10

It is easier to assess the moral dimension of interests that motivate actions than to assess their distributive consequences.

Question 11

Supply side considerations imply that the costs of organizing interests are low when the costs of identifying and mobilizing those with common interests are high.

Question 12

The greater the cost of organizing, the less prevalent the free-rider problem.

Question 13

The benefits from nonmarket action are higher when there are other means of generating them.

Question 14

In the Wilson-Lowi Matrix, interest group politics occurs when costs of nonmarket action are low and the benefits and harm from enacting a nonmarket alternative are concentrated.

Question 15

Constitutions and laws grant rights to individuals and organizations to pursue their interests and to protect those interests from the actions of others.

Question 16

Mobilizing interest groups members to deliver collective nonmarket action is a component of the effectiveness of nonmarket action.

Question 17

For the formation of an interest group, as long as the members share aligned interests it is not necessary that the benefits from collective action exceed the costs of organization.

Question 18

The actions of pluralistic interests concerned with a nonmarket issue compete in the arenas of private institutions.

Question 19

Incentives for nonmarket action may be moral or distributive.

Question 20

Aggregate benefits and per capita benefits are indicators of the demand for nonmarket action.

Question 21

The nature of political competition depends on the relative concentration and dispersion of the benefits and harm from enactment of a nonmarket alternative.

Question 22

Which of the following statements is applicable to the use of substitutes to obtain benefits from nonmarket action?

A) It is available only in the nonmarket environment.
B) It creates higher benefits for nonmarket action by providing an alternative.
C) The incentives for nonmarket action are smaller if the substitutes are closer to replicating the benefits.
D) It creates lower per capita benefits but high aggregate benefits.

Question 23

________ is a framework for analyzing political and nonmarket action on issues addressed in government institutions.

A) Organizational learning
B) Structured pluralism
C) Confrontational private politics
D) Cooperative private politics

Question 24

In the Wilson-Lowi Matrix, when the consequences from an alternative are widely distributed, the incentives to take nonmarket action are weak.

Question 25

According to the Wilson-Lowi Matrix, beneficiaries in client politics face low risk of opposition from the other side.

Question 26

Which of the following statements is true of the formation of interest groups?

A) Interest groups arise from moral concerns.
B) It cannot be specialized enough to focus on particular issues or strategies.
C) It is formed among individuals and organizations with nonaligned interests.
D) The benefits of collective action are higher than the costs of organizing it.

Question 27

A non-profit campaigning organization arranges a demonstration in front of the office of a company violating laws on proper waste disposal. The group has reports on the company's improper activities and forewarns that consumers will boycott its products. What of the following is applicable to the method used by the campaigning organization?

A) peaceful assembly
B) letter campaigns
C) confrontational
D) exclusive lobbying

Question 28

Outcomes of nonmarket actions are independent of the institutions that deal with the issue.

Question 29

The demand for nonmarket action is derived from the distributive consequences of an alternative. Which of the following measures the distributive consequences for firms?

A) Prices and qualities of products
B) Jobs and wages
C) Sales, profits, and market value
D) Availability of goods and services

Question 30

________ is the unit of analysis in structured pluralism.

A) Nonmarket issue
B) Market issue
C) Government institution
D) Crisis preparedness

Question 31

The demand for nonmarket action is characterized by ________.

A) costs of organizing for collective action
B) direct costs of undertaking nonmarket action
C) effectiveness of nonmarket action
D) alternative means for achieving benefits

Question 32

Which of the following will provide little incentive for the demand of nonmarket action, in terms of interests?

A) high aggregate benefits
B) widely distributed aggregate benefits
C) concentrated aggregate benefits
D) high per capita benefits

Question 33

The ________ is associated with identifying, contacting, motivating, and organizing those with aligned interests.

A) amount of market action
B) demand for market action
C) amount of nonmarket action
D) demand for nonmarket action

Question 34

The demand for nonmarket action is derived from the distributive consequences of an alternative. Which of the following measures the distributive consequences for consumers?

A) Prices, qualities, and availability of goods and services
B) Jobs and wages
C) Sales and profits
D) Market value

Question 35

Which of the following factors affects the costs of nonmarket action?

A) size of the interest groups and its coverage of legislative districts
B) per capita benefits for a union
C) increase in demand for a company's products
D) creating substitutes closer to replicating the benefits

Question 36

Which of the following is a nonmarket action?

A) A company requires extensive submission of paperwork to receive a refund for a product purchased from one of its outlets.
B) A company decides to hire temporary employees to handle its new project.
C) A company arranges a group of lawyers to lobby at the county level to influence the government about financial regulations.
D) A company decides to open another branch in California to expand its businesses.

Question 37

________ is one of the components of the cost of nonmarket action.

A) Per capita benefits for an individual interest
B) Aggregate benefits to the interests
C) Effectiveness of nonmarket action
D) Substitutes

Question 38

In the Wilson-Lowi Matrix, when the benefits are widely distributed and the harm is concentrated, those bearing the harm have a weaker incentive to take nonmarket action than do the beneficiaries.

Question 39

In nonmarket analysis and strategy formulation, interests are characterized as ________.

A) moral and distributive
B) supply and demand
C) monistic
D) aligned

Question 40

The outcome of structured pluralism is a(n) ________ to address a nonmarket issue.

A) escalation
B) corporate campaign
C) company policy
D) public policy

Question 41

In client politics, the ________.

A) alternative is favored over the status quo
B) status quo is favored over the alternative
C) benefits are widely distributed
D) harm is concentrated

Question 42

Which of the following statements is true of interest group politics?

A) An alternative is to be adopted over the status quo to represent the widely distributed benefits.
B) The beneficiaries face little risk of opposition from the other side.
C) The outcome is largely determined by the amounts and effectiveness of the nonmarket action generated by the interests on each side of the issue.
D) The outcome is determined by the preferences of a majority.

Question 43

What is coverage? How does it affect the cost and effectiveness of nonmarket action?

Question 44

In ________ politics, benefits from the alternative are widely distributed, whereas the harm from the alternative is concentrated.

A) majoritarian
B) interest group
C) client
D) entrepreneurial

Question 45

Which of the following is not included in the distributive politics spreadsheet?

A) costs of organizing for nonmarket action
B) institutional officeholders
C) available substitutes
D) demand for nonmarket action

Question 46

What is interest group politics?

Question 47

Supply side considerations imply that the ________.

A) costs of organizing interests are high when the costs of identifying and mobilizing those with common interests are high
B) costs of organizing interests are low when the free-rider problem is more prevalent and fewer means are available to mitigate it.
C) costs of organizing interests are low when the costs of identifying and mobilizing those with common interests are high
D) strategies that increase the costs of collective action will increase the impact of the group's nonmarket action.

Question 48

Write a short note on political entrepreneurs.

Question 49

The politics of Social Security are ________.

A) majoritarian
B) interest group
C) client
D) entrepreneurial

Question 50

Which of the following statements is true of the free-rider problem?

A) higher the cost of organizing, the more serious the free-rider problem
B) bundling together nonmarket action and services for interest group members increases the free-rider problem
C) free-rider problem does not affect the funds available for nonmarket action
D) higher the costs of collective action, the less prevalent the free-rider problem

Question 51

Which of the following statements is true of the distributive politics spreadsheet?

A) The supply side information includes available substitutes, the aggregate benefits, and the per capita benefits for individual members of an interest group.
B) Institutions are included in the spreadsheet because they are viewed as arenas in which nonmarket action is likely to be generated.
C) The spreadsheet is intended to summarize rather than substitute for the analysis of the benefits and costs of nonmarket action.
D) It pertains to all the alternatives available to a nonmarket issue.

Question 52

Which of the following statements is true of entrepreneurial politics?

A) An alternative is to be adopted over the status quo to represent the widely distributed benefits.
B) The beneficiaries face little risk of opposition from the other side.
C) The outcome is largely determined by the amounts and effectiveness of the nonmarket action generated by the interests on each side of the issue.
D) The outcome is determined by the preferences of a majority.

Question 53

What is the distributive politics spreadsheet?

Question 54

Briefly describe the supply-and-demand framework that is used to assess the amount or quantity of nonmarket action.

Question 55

Which of the following statements is true of the effectiveness of nonmarket action?

A) The lower the number of members of an interest group, the greater is its potential effectiveness.
B) The greater the coverage by the members of an interest group, the less effective is its nonmarket action.
C) The costs of organizing interests are low when the costs of identifying and mobilizing those with common interests are high.
D) The greater the resources available to an interest group, the greater the set of activities that can be funded.