Chapter 5 – Goverment’s role and Goverment Failure – Flashcards

Unlock all answers in this set

Unlock answers
question
The many layers of the federal government in the United States:
answer
lead to economic inefficiencies because of difficulty aggregating and conveying information.
question
(Consider This) The collective action problem refers to:
answer
difficulty in organizing and motivating large groups to achieve desired outcomes.
question
Government fiscal policy involves changing which of the following?
answer
Taxes and government spending.
question
As it relates to owners and managers, the principal-agent problem results from the:
answer
separation of corporate ownership and control.
question
Public choice economists:
answer
use the tools of economics to analyze decision making, politics, and elections in the public sector.
question
Public choice theorists contend that:
answer
public bureaucracies are inherently less efficient than private enterprises.
question
Suppose a college economics department decides to use a single economics text for all sections of principles of economics. Also assume that the three individual members of the textbook selection committee have the following preferences. Professor: a)Adam, b)Bennett, c)Clay Ideal Textbook: a)C/F, b)M/B, c)O/S Analytical level of the textbook: a)Very difficult, b)moderately difficult, c)relatively easy
answer
selecting the M/B book.
question
Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will result in a decision to order:
answer
a large pizza.
question
When congressional representatives vote on an appropriations bill, they must vote yea or nay, taking the bad with the good. This statement best reflects the:
answer
concept of limited and bundled choices.
question
A situation in which society may not be able to rank its preferences consistently through paired-choice majority voting refers to:
answer
the paradox of voting.
question
The U.S. federal government's largest unfunded liability is:
answer
Social Security.
question
Monetary stimulus is only helpful to an economy:
answer
that is in recession.
question
Regulatory capture often occurs because of which of the following?
answer
Nearly everyone with expertise works in the regulated industry.
question
"Pork-barrel" legislation that contains funding for hundreds of earmarks throughout numerous states often reflects:
answer
logrolling
question
The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state. From this we can definitively conclude:
answer
nothing; the Road Runner Club may have donated to Senator Sly because he already supported the jogging paths.
question
An economic analysis of the relationship between proposed legislation affecting major employers in each state and the voting patterns of senators and representatives in Congress on that legislation would fit within the subcategory of economics called:
answer
public choice theory.
question
Public choice theory focuses on the economics of:
answer
government decision making, politics, and elections.
question
Which of the following is considered a potential solution to some regulatory capture?
answer
Deregulation of the industry.
question
Deregulation:
answer
eliminates regulatory capture and can improve outcomes by increasing competition.
question
"Vote for my special local project and I will vote for yours." This political technique:
answer
is called "logrolling."
question
(Consider This) Government passes a law requiring all domestic clothing factories to pay workers at least $20 per hour. As a result, domestic clothing companies move their operations overseas, leaving domestic workers unemployed. This situation illustrates the problem of:
answer
unintended consequences.
question
Individual accountability within the government bureaucracy:
answer
tends to be lacking because of civil service protections and the complexity of government.
question
Suppose that friends Jennifer, Stephanie, and Megan cannot agree on how much to spend for a bouquet of flowers to send to a person that allowed them to use their beach house for the weekend. Jennifer wants to buy a moderately priced bouquet, Stephanie wants to buy an expensive bouquet, and Megan wants to buy a very expensive bouquet. Assuming no paradox of voting, majority voting will result in the decision to buy:
answer
an expensive bouquet.
question
The field of economics that analyzes government decision making, politics, and elections is called:
answer
public choice theory.
question
Public choice economists contend public bureaucracies are inefficient primarily because:
answer
of the absence of competitive market pressures.
question
Proponents of deregulation point to all of the following industries as examples of successful deregulation except for:
answer
Pharmaceuticals
question
(Last Word) In their effort to provide disaster relief after Hurricane Katrina, the Federal Emergency Management Agency (FEMA) made payouts on as many as 900,000 claims with invalid Social Security numbers or false names and addresses. This example illustrates:
answer
bureaucratic inefficiency.
question
Regulatory capture is said to have occurred when which of the following is true?
answer
Rules and enforcement in an industry are heavily influenced by the industry being regulated.
question
According to some economists, the private sector is more efficient than the public sector mainly because:
answer
the private sector has a clear test of performance: profit and loss.
question
In corporations, owners are _______ and managers are ________.
answer
principals; agents
question
Public choice economists hold that politicians will:
answer
favor programs entailing immediate and clear-cut benefits and vaguely defined or deferred costs.
question
Which of the following is a source of government failure?
answer
The enormous size and scope of government.
question
Public choice theorists point out that the political process:
answer
differs from the marketplace in that voters and congressional representatives often face limited and bundled choices.
question
Which one of the following topics would be of the most interest to a public choice economist?
answer
Rent-seeking behavior.
question
The unlawful misdirection of governmental resources for personal gain is known as:
answer
political corruption.
question
Under what circumstances would government loan guarantees be socially beneficial?
answer
When the guarantees promote production of goods otherwise underproduced by the private sector.
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New