Question : 51) Competition in the political marketplace can result in the : 1238659

 

51) Competition in the political marketplace can result in the efficient provision of a public good if

A) there is only one political party.

B) voters’ preferences are unknown.

C) benefits are small.

D) voters are well informed and evaluate the alternatives.

E) politicians need to be elected by majority votes.

 

52) Which of the following can bring about an efficient level of public goods being provided by the government?

A) voters who do not care about benefits and costs of public goods

B) rational ignorance on the part of voters

C) competition between political parties trying to win an election

D) self-interest among government bureaucrats

E) free riding on the part of voters

 

53) Which of the following is necessary for competition in the political marketplace to result in the production of the efficient amount of a public good?

A) bureaucrats practice self-interest

B) well informed voters and political parties

C) rational ignorance

D) maximum differentiation of political competitors

E) Answers A, B and D are correct.

54) The government can be large in size because of

A) inefficient overprovision caused by high voter turnout in elections.

B) efficient overprovision caused by rational voter ignorance.

C) inefficient overprovision caused by rational voter ignorance.

D) efficient overprovision caused by irrational voter ignorance.

E) inefficient overprovision caused by rational politician/bureaucrat ignorance.

 

55) One reason the size of the government is large is because

A) people’s demand for private goods grows faster than their demand for public goods.

B) politicians do not support spending on things such as education and public health.

C) voters’ incomes grow, thereby causing an increased demand for private goods.

D) budget maximization by bureaucrats and rational ignorance by voters lead to overproduction.

E) rational ignorance by politicians who follow the principle of minimum differentiation.

 

56) Inefficient overproduction of a public good by the government is

A) the only efficient method of producing public goods.

B) not likely to occur when voters choose rational ignorance.

C) the term used to describe a surplus of a public good.

D) one explanation of why government might be large.

E) not likely to occur if voters are rationally ignorant.

57) When someone enjoys the benefit of a good or service but does not pay for it, that person

A) is a free range consumer.

B) is a free rider.

C) receives no marginal benefit from the good.

D) must be consuming an excludable good.

E) is contributing to the tragedy of the commons.

 

58) The marginal benefit of a public good is the

A) sum of the marginal benefits of all the individuals at each quantity.

B) marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy.

C) marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy.

D) benefit of the last person’s consumption.

E) average of the marginal benefits of all the individuals at each quantity.

 

59) The marginal benefit curve of a public good

A) slopes downward.

B) slopes upward.

C) is vertical.

D) is horizontal.

E) is U-shaped.

60) Sue and Mark are the only two members of a community. Sue’s marginal benefit from one lighthouse is $2,000 and Mark’s marginal benefit is $1,000. If the marginal cost of one lighthouse is $2,500 and if a lighthouse is a public good, then for efficiency the lighthouse should

A) be built but only Sue should be allowed to use it.

B) be built but only Mark should be allowed to use it.

C) be built and both Sue and Mark should be allowed to use it.

D) not be built because its marginal cost exceeds Sue’s marginal benefit.

E) not be built because its marginal cost exceeds both Sue’s and Mark’s marginal benefit.

 

61) The efficient quantity of a public good is

A) the quantity produced by private firms.

B) the quantity at which the marginal benefit equals the marginal cost.

C) impossible to determine because each person’s marginal benefit is different.

D) the quantity at which the marginal benefit exceeds the marginal cost by as much as possible.

E) the quantity determined by the intersection of the demand curve and the supply curve.

 

62) The efficient quantity of a public good can’t be produced by private firms because

A) only the government has the necessary resources.

B) it is impossible to determine the efficient amount.

C) consumers have an incentive to free ride and not pay for their share of the good.

D) private firms aren’t large enough.

E) the price would be too high if private firms produced the goods.

63) If the two political parties propose similar or identical policies, they are following the principle of

A) rational ignorance.

B) inefficient overprovision.

C) free riding.

D) minimum differentiation.

E) the commons.

 

64) ________ is the decision not to acquire information because the marginal cost of doing so exceeds the marginal benefit.

A) Rational ignorance

B) The principle of minimum differentiation

C) A free rider

D) Consumer ignorance

E) The tragedy of the commons

 

65) Government bureaucracies over-provide public goods and grow larger because of their goal of ________ combined with ________ of the voters.

A) budget maximization; rational ignorance

B) budget minimization; irrational intelligence

C) budget maximization; minimum differentiation

D) budget maximization; irrational exuberance

E) minimum differentiation; budget maximization