Lesson 10 QQ
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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
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turn out not to be transitive and will not result in a consistent outcome.
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The voting paradox suggests that the \"voting market,\" as represented by elections
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may often lead to an inefficient outcome in representing consumer preferences compared to the private market for goods and services.
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Economists often analyze the interaction of individuals and firms in markets. Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others, a process that is referred to as
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rent seeking
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A difference between the market and the public sector is that
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government can use force, while the market does not.
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Which of the following statements about rent seeking is false?
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Because rent seeking redistributes society's resources, anyone engaging in such behavior is violating the law.
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The theory of public choice suggests that
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government agencies tend to be inefficient because they are subject to institutional arrangements in which managers do not have an incentive to be efficient.
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The public choice model assumes that government policy makers
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are likely to pursue their own self-interests, even if their self-interests conflict with the public interest.
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What is meant by the term \"rational ignorance\" in public choice theory?
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It means the lack an economic incentive for voters to become informed about a pending legislation
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The public choice model
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applies economic analysis to government decision making.
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Which of the following statements refers to rent seeking?
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\"Laws passed by the federal government often provide benefits for a small number of individuals. These individuals, in turn, have an incentive to contribute to the campaigns of politicians who pass these laws.\"
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When comparing market and public sector decision making, which statement is NOT true?
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In both decision making sectors, majority rule is how things are done
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When members of Congress vote to pass new legislation, they will
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fail to consistently represent the underlying preferences of voters.
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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
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Jasmine and Rose vote for Alzheimer's research, Ivy votes for increased border security, and Alzheimer's research wins.
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Why is a typical person likely to gather more information when buying a new car than when voting for a member of Congress?
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because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome
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Which of the following is NOT a viewpoint of the self-interest theory of government?
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Government officials are assumed to align their interests with public interests.
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Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public sector?
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The incentive system for individuals to perform efficiently are vastly different.
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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
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Ivy and Rose vote for education subsidies, Jasmine votes for Alzheimer's research, and education subsidies wins.
