Question 1

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

Accepted Answer

Rent seeking refers to the act of seeking to increase one's share of existing wealth without creating new wealth. Inheritance can lead to rent-seeking behavior within families as family members may compete to receive a larger share of the inherited wealth. This can lead to conflicts and tensions within the family.

Question 2

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 means that the decision is made based on the preference of more than half of the voters. However, this does not necessarily mean that the decision is the best one for the community as a whole. It is possible that the majority may not fully consider or understand the potential costs and benefits of the decision, leading to a situation where the total benefits to the community are less than the total costs.

Question 3

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 try to appeal to a broad range of voters and may position themselves as more moderate. To contrast themselves with opponents, they may try to paint their opponents as less mainstream or extreme.

Question 4

According to public choice theorists,people in the market sector and people in the public sector behave differently because
A) people in the two sectors have different motives.
B) the two sectors have different institutional arrangements.
C) government employees do not act in their own self-interest.
D) there are economies of scale in the market sector.

Accepted Answer

Public choice theory suggests that individuals in the market sector are driven by self-interest and profit motives, while individuals in the public sector are driven by other incentives, such as the desire to serve the public good or to advance their own careers. Additionally, the institutional arrangements in the two sectors differ significantly, with the market sector being characterized by private property rights and competition, while the public sector is often subject to bureaucratic and political constraints.

Question 5

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

Accepted Answer

Rent seeking refers to efforts by groups or individuals to influence the government to redistribute resources in their favor, without creating any new wealth. This results in a net loss to society, making it a socially wasteful activity. Special interest groups often engage in rent seeking to benefit their own narrow interests at the expense of the general public.

Question 6

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

Accepted Answer

If people believe that their vote matters and can potentially make a difference in the outcome, they are more likely to make the effort to go out and vote. On the other hand, if people perceive that their vote has no impact, they may feel apathetic and be inclined to abstain from voting.

Question 7

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

Accepted Answer

A congressional district represents a specific geographic area and the interests of the constituents within that area. If a congressman or congresswoman focuses solely on the needs and desires of their district, to the detriment of larger national issues, they could be considered a special interest group. Additionally, if the district has a particular economic, social or political interest, their representative may be viewed as a special interest group as well.

Question 8

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 9

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

Accepted Answer

Logrolling occurs when legislators agree to support each other's bills or provisions in exchange for reciprocal support on their own bills or provisions. This practice is commonly used in political negotiations to build coalitions and pass legislation, often leading to compromises or trade-offs between lawmakers on different issues.

Question 10

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 11

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 accurate. There can be various reasons why voters choose not to be informed about political and governmental issues, such as lack of interest or time, but it cannot be assumed that they are not smart enough to understand the issues.

Question 12

Public choice is concerned with
A) relative prices.
B) government decision making.
C) marketing techniques.
D) consumer surveying.

Accepted Answer

Public choice is concerned with analyzing how government decision making is influenced by individual incentives and behavior, rather than just assuming that government officials act in the best interest of the public. Public choice theory looks at how different actors within government, such as politicians, bureaucrats, and interest groups, can have competing interests that affect policy outcomes.

Question 13

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

This statement is not necessarily true. Rent seeking can occur regardless of whether the parents' inheritance plans are clear or uncertain. It depends more on the individual personalities and behaviors of the family members involved.

Question 14

Public choice deals exclusively with business decisions.

Accepted Answer

Public choice theory focuses on the application of economic principles to the analysis of political decision-making, including decisions made by government officials and politicians, rather than business decisions.

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

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 make rational cost-benefit analyses before taking any action, including voting. Therefore, low voter turnout may occur when individuals perceive the cost of voting, such as finding time to vote or researching candidates' positions, to outweigh the benefits of voting.

Question 17

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 favored by more than half of the voters wins. The median voter represents the middle point of the distribution of voters' preferences and therefore, their preferred outcome is also the one favored by more than half of the voters. Thus, the voting outcome and the most preferred outcome of the median voter are the same.

Question 18

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

Accepted Answer

Rent seeking behavior by producers leads to a misallocation of resources, leading to decreased economic and social welfare. This behavior often involves lobbying for policies that benefit a particular industry or firm, rather than benefiting society as a whole. The resulting distortions in markets and increased inequality can have negative effects on economic growth and overall well-being.

Question 19

Simple majority rule will almost always generate efficient outcomes.

Accepted Answer

Simple majority rule may not always generate efficient outcomes as it can lead to the tyranny of the majority where a majority imposes its will on a minority, leading to outcomes that might not be socially optimal. It may also not take into account the preferences of minority groups and lead to incomplete representation.

Question 20

Public choice refers to
A) the decisions and decision-making processes that individuals go through to solve public problems.
B) political decisions made in the interest of the public at large.
C) the application of economic principles and tools to public-sector decision making.
D) the process that individuals undergo to decide what goods and services they will purchase and consume.
E) the process that individuals undergo to decide whether or not they will pursue a career government service.

Accepted Answer

Public choice theory is the application of economic principles and tools to public-sector decision making. It analyzes how individuals and groups make decisions in the political process and how those decisions affect public policy. The focus is on understanding how incentives, institutions, and rules shape the behavior of politicians, bureaucrats, and voters.

Quiz 19: Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions