Deck 7: A Theory of Collective Action

Question 1

The optimal collective decision rule _____.

A)will be 100 percent if collective decision-making costs are high
B)will be simple majority rule if external costs are extremely large
C)has declining external costs as voting rule moves from unanimity
D)is likely to be less than majority rule

Answer 1

C

Question 2

The point where the sum of the external and decision-making costs is minimized is _____.

A)unanimity
B)Pareto efficient
C)simple majority rule
D)the optimal collective decision rule

Answer 2

D

Question 3

With a unanimity decision-making rule,external costs are _____.

A)zero
B)indeterminate
C)high
D)minimized

Answer 3

A

Question 4

The optimal collective decision rule is found where _____.

A)decision-making costs are minimized
B)the sum of the external and decision-making costs are minimized
C)marginal political costs and marginal political benefits are equalized
D)external costs are minimized

Question 5

Which of the following is not true of collective decision-making costs?

A)They impede collective action.
B)They are the reason why unanimity rule is not the optimal decision-making rule.
C)They imply that simple majority rule is the optimal decision-making rule.
D)They increase the closer the decision rule gets to unanimity.

Question 6

In the context of collective decision-making,external costs are _____.

A)the costs imposed on everyone in the group
B)the costs imposed on those outside the group
C)the costs imposed on those who voted for the decision
D)the costs imposed on those harmed by the decision

Question 7

It is correct to say that individuals _____ preferences and groups _____ preferences.

A)have;have
B)do not have;have
C)do not have;do not have
D)have;do no have

Question 8

Translating the preferences of each individual into the preferences of the group is _____.

A)a challenge faced only by clubs
B)a challenge faced by all collective decision making organizations
C)inherent in all decision making
D)a challenge faced only by government

Question 9

Which of the following is not a negative externality?

A)smog
B)noise pollution
C)substandard housing
D)majority voting

Question 10

_____ increase as we move away from unanimity rule.

A)External costs
B)Internal costs
C)Pareto efficiency
D)decision-making costs

Question 11

From an economic standpoint,if one believes that a group would be better off from a policy change,this implies that _____.

A)a majority of the group would be better off because of the change
B)a super-majority of the group would be better off because of the change
C)everyone in the group would be better off because of the change
D)the total effect of the change is positive,even if most individuals are not better off

Question 12

Political decisions will be _____ only if the decision was approved by _____.

A)Pareto improvements;a unanimous vote
B)in the public interest;a majority vote
C)Pareto improvements;a majority vote
D)undertaken;a unanimous vote

Question 13

A unanimity rule for collective decision making has the disadvantage of _____.

A)accepting too many inefficient outcomes
B)high decision-making costs
C)not clearly being a Pareto improvement
D)increasing external costs

Question 14

Collective decision making costs _____.

A)decrease as we get closer to unanimity
B)increase as more people have to agree
C)are an impediment to individual action
D)are the reason why simple majority rule is always optimal

Question 15

As the percentage of a group required for agreement approaches 100 percent,_____ costs _____.

A)decision-making costs;increase
B)decision-making costs;decrease
C)political costs;increase
D)political costs;decrease

Question 16

Two types of costs must be considered when selecting the optimal decision rule.They are _____ and _____.

A)decision-making costs;external costs
B)marginal costs;variable costs
C)decision-making costs;political costs
D)political costs;external costs

Question 17

If 100% of individuals in a group are required to agree before an action can take place then _____.

A)external costs will be high
B)we cannot determine the level of external costs without additional information
C)external costs will be zero
D)external costs will be low

Question 18

Which of the following is not a correct statement about individual and group preferences?

A)Individuals have preferences
B)Groups have preferences
C)Individuals within groups have preferences
D)Groups make collective decisions on behalf of their members

Question 19

Which of the following would not be a Pareto superior move?

A)A market exchange.
B)A group that unanimously decides to undertake an activity.
C)A group that decides by majority rule to undertake an activity.
D)A contingent contract for a group to undertake an activity at some time in the future.

Question 20

A key difference between clubs and government is _____.

A)government requires everyone within its jurisdiction to participate
B)government acts on behalf of the poor
C)government is not frivolous,like most clubs
D)government requires collective action

Question 21

Philosopher John Rawls developed a thought experiment to help determine a standard by which we could say individuals are in agreement with the constitutional rules and,thus,actions of government.Behind his "veil of ignorance" _____.

A)people know nothing about their friends and family
B)people know nothing about themselves
C)people know nothing about causal relationships
D)people know nothing about politics

Question 22

The key point about a TIT for TAT strategy is _____.

A)it is confusing to others
B)it leads to sub-optimal outcomes
C)that over time it encourage cooperation
D)that it leads to a one time victory

Question 23

The motivation for collective action is to do things that benefit society as a whole.

Question 24

Employing the TIT for TAT strategy in a repeated prisoners' dilemma game means _____.

A)that you will lose
B)defecting when the other person cooperates
C)attacking when the other person defects
D)cooperating as long as the other person cooperates

Question 25

In a repeated prisoner's dilemma situation,cooperation can be achieved _____.

A)if player A cooperates as long as player B cooperates
B)if player A continually defects on player B
C)if player A cooperates regardless of what player B does
D)never

Question 26

From an economic point of view,the idea of establishing a government to further the will of the majority _____.

A)means that marginal political costs and marginal political benefits are being equalized
B)makes sense because the majority could exploit the minority
C)does not make any sense because the majority could exploit the minority
D)would lead to a large transitional gains trap

Question 27

Fair outcomes are the result of fair rules defines _____.

A)a procedural theory of justice
B)a constitutional theory of justice
C)justice
D)a consensus theory of justice

Question 28

Representative democracy works best _____.

A)to allocate resources when constitutional rules limit the scope of collective action
B)to equalize income when constitutional rules mandate a simple majority rule for all collective decision-making
C)with a strong executive branch
D)external costs of collective decision-making are extremely high

Question 29

The optimal size of a club that shares a public good _____.

A)gets smaller if external costs decline
B)gets larger if external costs decline
C)gets smaller if congestion costs decline
D)gets larger if congestion costs decline

Question 30

From an economic point of view,_____ makes a lot of sense because it takes advantage of the gains produced by specialization.

A)bicameral legislatures
B)representative democracy
C)proportionality in the House of Representatives
D)bureaucracy

Question 31

Groups have preferences.

Question 32

If a public good never becomes congested _____.

A)the optimal number of users is infinite
B)it is evidence that it has been under produced
C)marginal costs are equal to average costs across the entire range of output
D)the marginal reduction in cost per user curve is flat

Question 33

If a good is congestible,then _____.

A)the optimal sharing group is a the national level
B)the optimal club size is where marginal reduction in cost per user is minimized
C)some congestion is optimal
D)marginal costs are constant for any possible output level

Question 34

An increase in congestion costs associated with a public good provided through clubs will _____.

A)lead to new clubs being formed
B)lead to a reduction in the optimal size of the club
C)be unrelated to congestion costs
D)lead to fewer clubs being formed

Question 35

Collective action is successful to the extent that it improves the welfare of those who participate in it.

Question 36

Individuals within a group have preferences.

Question 37

The optimal sharing group _____.

A)increases as the cost of the public good increases
B)declines as the cost of the public good increases
C)declines as the cost of the public good declines
D)increases as the cost of the public good increases

Question 38

The results of human action but not of human design

A)have traditionally led to anarchy
B)can easily be converted into collective decision-making
C)have frequently evolved over time into self-enforcing social institutions
D)is in actually the result of planned education funding

Question 39

A _____ of representative democracy is it _____.

A)downside;increases decision-making costs
B)benefit;increases decision-making costs
C)downside;reduces decision-making costs
D)benefit;reduces decision-making costs

Question 40

Optimal constitutional rules should _____.

A)be decided by a supermajority of the current legislature
B)be decided by a majority of people in a society
C)be agreed upon by a consensus of the writers of the constitution
D)have the support of a consensus of people in a society

Question 41

"Americans hate broccoli." "Because so few Americans like broccoli,average broccoli sales are lower in America then anywhere else." Which of these two statements about the preferences of Americans is more accurate? Why?

Question 42

All group decisions are Pareto superior moves.

Question 43

The optimal decision rule is less than unanimity.

Question 44

Representative democracy makes no sense from an economic point of view.

Question 45

For private consumption goods,the optimal number of users is determined by the unanimity rule.

Question 46

Rawls argued that agreement on certain rules from behind a "veil of ignorance" would make those rules optimal.

Question 47

A unanimous decision rule is equivalent to market exchange in terms of efficiency.

Question 48

Provide a description of the TIT FOR TAT strategy.Give a brief explanation of the importance of TIT FOR TAT strategy in Robert Axelrod's computer tournaments and the implications of his results for public policy.

Question 49

List two economic reasons why representative democracy makes sense

Question 50

Actions based on the more general Pareto criteria are preferable to actions based on application of interpersonal utility calculations.

Question 51

The smaller the percentage of voters required for collective action,the higher the external costs.

Question 52

If the "Marginal Congestion Cost" for a public good is constant then the optimal number of users is infinite

Question 53

A unanimity rule suffers from the holdout problem.

Question 54

When collective agreement on a policy is 100 percent of all voters,external costs are minimized.

Question 55

Draw and explain how the optimal collective decision rule is determined.Clearly label your graphs and axis.