Question : 18.1   Public Choice 1) One argument advanced in favor of not : 1388006

 

18.1   Public Choice

 

1) One argument advanced in favor of not increasing the income tax on individuals with high income is that

A) increasing income tax increases wealth which contributes to increases in GDP.

B) increasing the income tax on these individuals will reduce economic efficiency.

C) increasing the income tax affects mostly middle-income and low-income individuals who are already paying heavy income taxes.

D) not increasing income taxes will discourage corporations from increasing investment.

 

 

2) Tax laws affect

A) economic efficiency but not equity.

B) equity but not economic efficiency.

C) consumption and production, not efficiency and equity.

D) both efficiency and equity.

 

 

3) What are the two types of taxes that working individuals pay on their earnings?

A) individual income tax and sales tax

B) payroll tax and sales tax

C) individual income tax and social insurance taxes

D) property tax and payroll tax

 

4) According to public choice theory, policymakers

A) place the interests of the public above their own self-interest.

B) are likely to pursue their own self-interest, even if their self-interest conflicts with the public interest.

C) act in ways to maximize economic efficiency.

D) act in ways to bring about an equitable distribution of society’s wealth.

 

 

5) The public choice model

A) examines the degree of market power that the public exerts in a market economy.

B) examines the public’s role in appointing politicians and ensuring that elected officials act in ways to reflect the public’s preferences.

C) applies economic analysis to government decision making.

D) applies economic analysis to the collective decision making of consumers.

 

Table 18-1

 

 

Ivy

Jasmine

Rose

Subsidies for education

2nd

3rd

1st

Research on Alzheimer’s

3rd

1st

2nd

Increased border security

1st

2nd

3rd

 

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1) Subsidies for education, 2) Research on Alzheimer’s or 3) Increased border security. Table 18-1 shows three voters’ rankings of the alternatives.

 

6) Refer to Table 18-1.  Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to subsidies for education and research on Alzheimer’s,

A) Ivy and Jasmine vote for education subsidies, Rose votes for Alzheimer’s research, and education subsidies wins.

B) Ivy and Rose vote for education subsidies, Jasmine votes for Alzheimer’s research, and education subsidies wins.

C) Jasmine and Rose vote for Alzheimer’s research, Ivy votes for education subsidies, and Alzheimer’s research wins.

D) Jasmine and Ivy vote for Alzheimer’s research, Rose votes for education subsidies, and Alzheimer’s research wins.

 

 

7) Refer to Table 18-1.  Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to research on Alzheimer’s and increased border security,

A) Ivy and Jasmine vote for Alzheimer’s research, Rose votes for increased border security, and Alzheimer’s research wins.

B) Ivy and Rose vote for increased border security, Jasmine votes for Alzheimer’s research, and increased border security wins.

C) Jasmine and Rose vote for Alzheimer’s research, Ivy votes for increased border security, and Alzheimer’s research wins.

D) Jasmine and Ivy vote for increased border security, Rose votes for Alzheimer’s research, and increased border security wins.

 

8) Refer to Table 18-1.  Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to education subsidies and increased border security,

A) Ivy and Jasmine vote for education subsidies, Rose votes for increased border security, and education subsidies wins.

B) Ivy and Rose vote for increased border security, Jasmine votes for education subsidies, and increased border security wins.

C) Jasmine and Rose vote for education subsidies, Rose votes for increased border security, and education subsidies wins.

D) Jasmine and Ivy vote for increased border security, Rose votes for education subsidies, and increased border security wins.

 

 

9) Refer to Table 18-1.  Suppose a series of votes are taken in which each pair of alternatives is considered in turn. The first pair considered is between subsidies for education and research on Alzheimer’s. The second pair considered is between Alzheimer’s research and increased border security. The third pair considered is between education subsidies and increased border security. In this case, the collective preferences of the voters

A) turn out to be transitive and will yield a consistent outcome.

B) turn out to be transitive but will not result in a consistent outcome.

C) turn out not to be transitive and will not result in a consistent outcome.

D) turn out not to be transitive but will yield a consistent outcome.

 

10) Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives:

a.subsidies for education

b.research on Alzheimer’s

c.increased border security

 

If voters prefer a to b and b to c, then if preferences are transitive,

A) they should prefer a to c.

B) they should prefer c to a.

C) they should be indifferent between a and c.

D) it is not always possible to rank voters’ preferences between a and c.