Question 1

Economists tend to favor policies like price controls and tariffs.

Accepted Answer

Economists generally do not favor price controls and tariffs as they can distort markets and result in inefficient outcomes. Instead, economists recommend policies such as free trade, deregulation, and market-based incentives.

Question 2

Which of the following statements is FALSE?

Accepted Answer

The statement "Small nondemocratic elites are more likely to consider the welfare of larger groups" is false. Small nondemocratic elites are more likely to prioritize their own interests and the interests of their close associates over the welfare of larger groups. Democracies, on the other hand, are structured in such a way that multiple groups and individuals have a say in decision-making, making it more likely that the welfare of larger groups is taken into consideration.

Question 3

Much of public choice argues that what the public wants isn't reflected in elected officials' actions. Yet there is a strong connection between famine prevention and democracy (more democracy means less famine), and this "exception" is completely consistent with ideas from public choice. Why?

Accepted Answer

According to public choice theory, elected officials may not always act in the best interest of their constituents due to various incentives and constraints. However, in the case of famine prevention, there is a strong incentive for voters to be informed and hold their elected officials accountable. This is because famine has immediate and dire consequences, making it a salient issue that is likely to motivate voters to pay attention to their representatives' actions. Therefore, more democracy (i.e. greater engagement and participation by voters) can lead to better famine prevention policies.

Question 4

Nobel Prize-winning economist Amartya Sen argued that famine in the history of the world could have been eliminated by:

Accepted Answer

Amartya Sen's argument states that famine could have been prevented if countries had systems of democracy and better governance, as democracy allows for open debate, freedom of expression and political accountability, and these features can help to ensure that famine is prevented. This argument is supported by research showing that democracy is associated with lower rates of famine deaths than authoritarian regimes. In contrast, foreign aid and government control over food distribution have not been consistently effective in preventing famine. Censoring the media can also undermine the development of effective famine responses.

Question 5

Which of the following is TRUE about the relationship between democracy and economic growth?

Accepted Answer

Research has shown that democracy generally leads to the creation of institutions that promote economic growth, including the protection of property rights, the rule of law, and the reduction of corruption. While there are exceptions to this relationship, such as some resource-rich countries or countries with large numbers of special interest groups, the overall trend is that democracy is associated with higher levels of economic growth.

Question 6

Which of the following statements is TRUE?

Accepted Answer

The answer of Which of the following statements is TRUE?
...

Question 7

According to the text, the 1974 famine in Bangladesh was largely a result of

Accepted Answer

The text states that "the government's misguided policies worsened the situation" and "the government's reluctance to acknowledge the situation and unwillingness to seek help from international sources contributed to the disaster." This suggests that bad government policies played a significant role in causing the famine.

Question 8

If a policy transfers $100 to a special interest group at a cost of $4,000 to society, the group would lobby:

Accepted Answer

The answer of If a policy transfers $100 to a...

Question 9

The reason democracies typically become richer is because:

Accepted Answer

Democracies typically become richer because it is in the self-interest of citizens to support policies that increase economic growth. In democracies, citizens have a say in government policies and they are more likely to support policies that promote economic growth, such as free trade and market-oriented policies. This leads to a more productive economy and higher levels of prosperity.

Question 10

Public choice theory suggests that larger special interest groups:

Accepted Answer

The answer of Public choice theory suggests that larger special...

Question 11

One reason for the good record of democracies on economic growth is that:

Accepted Answer

Democracies tend to support efficient policies that generate economic growth, such as investing in education and infrastructure, promoting innovation and entrepreneurship, and ensuring competition in the marketplace. This leads to overall prosperity for the public as a whole, rather than just a select few who gain economic resources in their favor through unfair means.

Question 12

According to public choice theory, a more democratic country:

Accepted Answer

Public choice theory suggests that a more democratic country will have more policies that promote economic growth because a larger share of the population is brought into power, and therefore policymakers are more likely to represent the interests of the majority of citizens.

Question 13

Suppose that a special interest group makes up 2% of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

Accepted Answer

The answer of Suppose that a special interest group makes...

Question 14

Economists Besley and Burgess found that a government is more responsive to food crises when there is:

Accepted Answer

The question states that the government's responsiveness to food crises is influenced by political competition and newspapers. Therefore, the best choice is D because it includes both factors.

Question 15

Suppose that a special interest group makes up 0.5% of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

Accepted Answer

The answer of Suppose that a special interest group makes...

Question 16

________ groups tend to favor more efficient policies.

Accepted Answer

The answer of ________ groups tend to favor more efficient...

Question 17

The greater the share of the population that is brought into power, the:

Accepted Answer

When a greater share of the population is brought into power, policies are more likely to be inclusive and serve the needs and interests of a larger portion of society. This could lead to policies that offer something for everyone in the society.

Question 18

Which of the following do democracies usually support?
I. institutions that are bad for economic growth
II. free markets, property rights, and the rule of law
III. policies that don't kill their own citizens

Accepted Answer

Democracies usually support free markets, property rights, and the rule of law (II) because they promote economic growth and individual freedom. They also support policies that don't kill their own citizens (III) because democracies prioritize the protection and well-being of their citizens. However, they do not typically support institutions that are bad for economic growth (I) as this goes against their interests in promoting a thriving economy.

Question 19

Suppose that a special interest group makes up 10% of the overall population. If a new proposal stands to generate $2 million in additional benefits to the group, the group will:

Accepted Answer

The answer of Suppose that a special interest group makes...

Question 20

Which of the following is TRUE about the effects of democracy?

Accepted Answer

Democracy leads to good institutions that help align self-interest with the social interest. While democracy does not guarantee perfect alignment between self-interest and the social interest, it does provide a framework for institutions that can promote it. Through the free and fair election of representatives, checks and balances on power, and protection of individual rights, democracy creates a system that can incentivize individuals and government officials to act in the best interest of society as a whole.

Quiz 20: Political Economy and Public Choice

Economists tend to favor policies like price controls and tariffs.

Which of the following statements is FALSE?

Much of public choice argues that what the public wants isn't reflected in elected officials' actions. Yet there is a strong connection between famine prevention and democracy (more democracy means less famine) , and this "exception" is completely consistent with ideas from public choice. Why?

Nobel Prize-winning economist Amartya Sen argued that famine in the history of the world could have been eliminated by:

Which of the following is TRUE about the relationship between democracy and economic growth?

Which of the following statements is TRUE?

According to the text, the 1974 famine in Bangladesh was largely a result of

If a policy transfers $100 to a special interest group at a cost of $4,000 to society, the group would lobby:

The reason democracies typically become richer is because:

Public choice theory suggests that larger special interest groups:

One reason for the good record of democracies on economic growth is that:

According to public choice theory, a more democratic country:

Suppose that a special interest group makes up 2% of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

Economists Besley and Burgess found that a government is more responsive to food crises when there is:

Suppose that a special interest group makes up 0.5% of the population. If a policy transfers $600 to the special interest at a cost of $100,000 to society, will the special interest group lobby for this policy?

________ groups tend to favor more efficient policies.

The greater the share of the population that is brought into power, the:

Which of the following do democracies usually support? I. institutions that are bad for economic growth II. free markets, property rights, and the rule of law III. policies that don't kill their own citizens

Suppose that a special interest group makes up 10% of the overall population. If a new proposal stands to generate $2 million in additional benefits to the group, the group will:

Which of the following is TRUE about the effects of democracy?