Public Choice – Flashcards
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Which were the theories/hypothesis tested by Glaeser and Saks? A.) Places with higher levels of income and education are less corrupt B.) The ethnic heterogeneity increases corruption C.) Places with more government revenues or regulations will have higher levels of corruption D.) All of the above
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D
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Which of the following is not true of the results of Glaeser and Saks I. More educated states, and to a lesser degree richer states, have less corruption II. Racial heterogeneity, especially percent African-American, increases corruption, although this effect is less robust III. No evidence whatsoever linking bigger government or more regulation with more corruption IV. There is a weak negative connection between corruption and state economic growth A.) Only I. B.) Only I. and II. C.) Only II. and IV. D.) All the above are true results of Glaeser
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D
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Theoretically, do higher levels of income and education reduce corruption? Why? A.) Yes. Voters with more education and income are more willing and able to monitor public employees and to take action when these employees violate the law B.) No. Voters with more education and income are less willing and able to monitor public employees and to take action when these employees violate the law C.) Yes. Voters with more education and income are less willing and able to monitor employees and to take action when these employees violate the law D.) Both A. and C. are correct
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A
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Why according to the reading, does heterogeneity increase corruption? A.) As voters become more diverse along ethnic or income lines, then voting will inevitably focus on the honesty of government officials rather than redistribution B.) As voters become more diverse along ethnic or income lines, then voting will inevitably focus on redistribution rather than on the honesty of government officials C.) A and B are the same and correct D.) Neither A or B is correct
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B
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Theoretically, bigger governments tend to increase corruption. Why? A.) Smaller governments will have more assets to steal and more rules to subvert B.) Bigger governments will have more assets to steal and more rules to subvert C.) Bugger governments will have fewer assets to steal and fewer rules to subvert D.) Smaller governments will have more assets to control and more rules to subvert
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B
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"The benefits of corruption come from government actors being able to allocate resources, including the right to bypass certain regulations, to private individuals." As such, the benefits to a political actor from being corrupt increase with A.) Increases in size of government and in the individual's discretion over government actions B.) Increases in the number of regulations as opportunities for helping private actors evade these regulations increases, therefore increasing the possibilities for bribe taking C.) Both A and B D.) Neither A nor B
answer
C
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There is a benefit to being corrupt. Are there any costs to being corrupt? A.) The costs of corruption are driven by the probability of being caught and the penalties from being caught, which include imprisonment, electoral defeat, and loss of reputation B.) No costs of being corrupt C.) The benefits to society of corruption outweigh the costs D.) None of the above
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A
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The main contribution of this study beyond that which is already covered by cross-national research on corruption is that A.) It does not rely on opinion surveys like most cross country studies do but rather uses actual measures of corruption B.) It relies on opinion surveys like most cross country studies do C.) It does rely on opinion surveys and not actual measures of corruption D.) None of the above
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A
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On what basis do Glaeser and Saks think that the economic theory of corruption should follow the economic theory of crime? A.) Because corruption is defined as crimes by public officials for personal gain B.) Because corruption is defined as crimes by private officials for personal gain C.)Because corruption is defined as service by public officials for personal gain D.) All of the above
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A
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Ethnic tensions and divisions tend to increase corruption. Why? A.) If an area is torn apart by ethnic divisions and leaders tend to allocate resources towards backers of their own ethnicity, then members of one ethnic group might continue to support a leader of their own ethnic group, even if he is known to be corrupt B.) Ethnic tensions are always due to corruption C.) Corruption always causes ethnic tensions D.) None of the above
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A
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In public Choice ( and Niskanen model) the bureaucrat is assumed to A.) Maximize his utility B.) Minimize his utility C.) Maximize social utility D.) All of the above
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A
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Which of the following is not a factor listed by Niskanen as entering the Bureaucrat's utility function A.) Salary and perquisites B.) Power and reputation C.) Patronage and output D.) All of the above are correct
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D
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Which of these factors do not increase the bureaucrats budget as suggested by Niskanen A.) ease of making decisions B.) ease of managing the bureau C.) both A and B D.) neither A nor B
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C
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According to public choice theory, "the bureaucrat also maximizes his budget in order to survive". This is because the bureaucrat's tenure depends critically on the employees of the bureau. Employees have an interest in a larger budget just like the bureaucrat. Why? A.) Because a larger budget provides greater opportunities for promotion and more job security B.) Because a larger budget provides greater satisfaction for their boss C.) Because a larger budget shows how efficient they are D.) None of the above
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A
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Two major objections have been raised against the budget-maximizing utility hypothesis of the bureaucrat. Which are these critics? A.) the bureaucrat is not motivated primarily by his personal interests B.) budget maximization should not be central to the bureaucrat's personal interest or utility maximization C.) bureaucrats are egoistic D.) both A and B
answer
D
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According to the reading, the hypothesis that bureaucrats maximize budgets can be viewed from a static or a dynamic perspective. What does the static view say? A.) Bureaucrats are better off in rapidly growing bureaus than in slower growing or declining ones B.) Bureaucrats are better off in large-budget bureaus than in small-budget bureaus C.) Bureaucrats are better off in rapidly declining bureaus than in slower growing bureaus because it gives them control D.) All of the above
answer
B
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According to the reading, the hypothesis that bureaucrats maximize budgets can be viewed from a static or a dynamic perspective. What does the dynamic view say? A.) Bureaucrats are better off in large-budget bureaus than in small-budget bureaus B.) Bureaucrats are better off in rapidly growing bureaus than in slower growing or declining ones C.) Bureaucrats are better off in rapidly declining bureaus than in slower growing bureaus because it gives them control D.) All of the above
answer
B
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Critics of the Niskanen model propose substitutes to the budget as the bureaucrats maximand. Which is/are the substitutes as proposed by other studies? A.) Bureaucrats are more concerned about security and stability than budgets B.) Bureaucrats are more concerned about managerial discretion and thus maximize discretionary budget and not total budget C.) Top bureaucrats are more concerned with the intrinsic character of their work than with pecuniary considerations and hence focus on a "bureau-shaping" strategy D.) All of the above
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D
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According to the reading, the empirical evidence supports the view that public sector employees are more likely to support parties to the left and to endorse state intervention to get bigger budgets. A.) True B.) False
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A
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In one of the criticisms to the Niskanen model, Breton and Winthrobe argue that the bureaucrat's interests are essentially heterogeneous and that budget maximization is only one of many strategies pursued including: (size, budgets, discretion, prestige, self-preservation, security, secrecy, leisure, and patronage). What is Niskanen's response to this argument? A.) These objectives are dependent on the median voter theorem B.) Most of these objectives are dependent on a higher budget C.) Most of these objectives are dependent on efficiency D.) These objectives are dependent on the party in power
answer
B
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Niskanen assumes that bureaucrats attempt and succeed in their budget-maximizing strategies. The question that arises is that do bureaucrats actually succeed given that the bureaucrats budget and activities need to be approved by an external body (sponsor) which has the authority to block the bureau's budget-maximizing strategy? Niskanen believes that the answer is yes. What arguments does Niskanen present to advance support for his answer? A.) The sponsor is passive because he lacks the incentive to use his political power B.) The sponsor is passive because it does not have the capacity because of a lack of information and thus does not exercise that authority C.)Both A and B D.) Neither A nor B
answer
C
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The dilemma of professional associations that engage in lobbying on behalf of their members is A.) how to attract members when the product of lobbying is a public good. B.) their private actions are always at odds with the interests of society. C.) lobbying efforts tend to cancel out thus limiting the benefits of group membership. D.) the private benefits of membership typically outweigh the collective benefits and collective action therefore is not provided at the appropriate level.
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A
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A monopoly created by government at the behest of rent-seeking firms produces a social loss equal to A.) deadweight loss. B.) deadweight loss plus the amount spent in pursuit of rent-seeking. C.) the amount spent in pursuit of rent-seeking. D.) deadweight loss plus the cost of forgone production.
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B
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Areas of public policy that rent-seeking firms try to influence in their favor include all of the following except A.) tariffs and quotas. B.) taxation. C.) regulation. D.) median voter rights.
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D
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Rent-seeking includes the practice of A.) private firms pursuing the passage of government regulations that give them monopoly rights. B.) private firms pursuing favorable terms for using facilities. C.) government creating a monopoly through regulation and designating a government unit to be the sole provider. D.) private firms seeking to capture deadweight loss.
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A
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A municipality that presents a bond issue to voters to expand its fire-fighting capacity by a single, large amount with the only alternative option being the current level of service is engaging in A.) rent seeking. B.) logrolling. C.) agenda control. D.) median location choice.
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C
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Nobel laureate Kenneth Arrow [1951] proposed that in a democratic society, a collective decision-making rule should satisfy some criteria. Which of the following is not one of the criteria proposed by Arrow? A.) It must be able to rank all possible outcomes. B.) It must be consistent in the sense that if A is preferred to B and B is preferred to C, then A is preferred to C. C). Dictatorship is ruled out. Social preferences must not reflect the preferences of only a single individual. D.) It must give preference to minority views
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D
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Since direct majority voting is impossible in a large society, representative democracy is the next best alternative. Which are the places in a representative democracy? A.) Public employees (bureaucrats) B.) Special interest C.) The courts D.) All of the above
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D
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Posner's study of the social costs of regulation A.) compares the cost of regulation to its benefits. B.) estimates a range of the loss to society of regulation in several industries. C.) demonstrates that rent-seeking transfers profits from one group to another and does not harm society at large. D.) overstates the harm because it assumes industry estimates of demand elasticity
answer
B
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Public agencies face difficulty in successfully manipulating voter choice through agenda control A.) because voters are indifferent between options that either exceed or fall short of their preferred choice. B.) due to its violation of the Samuelson rule. C.) because selecting the reversion quantity correctly requires perfect information regarding voter demand. D.) due to voters always turning down options that exceed the optimal quantity E.) Both C and D
answer
E
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Which of the following best describes the field of Public Choice A.) It tries to explain how the economy works B.) It uses the methods and tools of economics to explore how politics and governments work C.) It uses the methods and tools of economics to explore how financial and goods markets work D.) None of the above
answer
B
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Which of the following statements is not true? A.) When someone makes an economic choice, they personally experience both the costs and benefits B.) In public choice, the people who benefit from a choice are always the people who bear the cost of the choice C.) In economic choice, both sides of the market have to agree on it while this may not be true in the case of public choices D.) All of the above are true
answer
B
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Public choice scholars such as Buchanan and Tullock see the state as organic because they see government as A.) a means by which rational, self-interested individuals combine to promote their personal interests through collective action B.) The authority that knows the welfare interests of its citizens and always takes actions to maximize those C.) Both A and B D.) Neither A and B
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A
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Using a majority voting method, a public good will only be provided in the quantity desired by the majority of the voters A.) True B.) False C.) Uncertain
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C
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Because of the problems with unanimity voting, majority voting which prevails in so many of the world's political systems is seen as an alternative. However, majority voting has its downside too. Which of the following is a downside of majority voting? A.) Majority voting allows the majority to push through projects designed for their own benefit, which everyone else is then forced to accept or pay for B.) The majority may impose its own values on the minority, prosecuting them for victimless lifestyle "crimes" such as drug-taking, and otherwise infringing their basic liberties C.) Both A and B D.) Neither A and B
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C
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If x is a single dimensional issue, the median position cannot lose under majority rule A.) True B.) False C.) Uncertain
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C
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Jake has political preferences that are transitive. He likes candidate A better than candidate B, and he likes candidate C better than candidate A. Therefore we know that he likes candidate C better than candidate B A.) True B.) False C.) Uncertain
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A
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Eric has political preferences that are intransitive. He likes candidate a better than candidate b, and he likes candidate b better than candidate c. Therefore, we know that he likes candidate a better than candidate c A.) True B.) False C.) Uncertain
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B
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The alternative approach to collective decision making that takes into account the ranking of voters' preferences is the A.) plurality rule B.) Condorcet rule C.) Borda rule D.) unanimity rule
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C
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Many people do not express their true preferences in elections, but vote tactically. Why is this so? A.) Because they can express their choice in elections, but may well end up with something they really hate so they might not vote for their favorite party but some other that has a chance of winning B.) Because people do not have the information on what is beneficial to them in the election C.) Both A and B D.) Neither A and B
answer
A
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Lindahl prices achieve unanimity among recipients of public goods by A.) excluding each recipient from just enough of the benefits of the goods to bring the amount consumed and demanded into correspondence B.) charging different prices for the same amount of public goods to different individuals C.) dividing the the total cost of provisioning the public goods equally among all recipients D.) assuring that the true preferences of free riders are discovered and they are charged accordingly
answer
B
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All of the following are true about logrolling except A.) logrolling can reduce welfare B.) logrolling takes into account different intensities of preferences about issues by voters C.) logrolling requires double-peaked preferences D.) logrolling can enhance welfare
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C
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Candidate A defeats Candidate B in an election even though Candidate B's view on the most important election issue is much closer to the median point among those voters casting ballots. Voters with views similar to B's on the main issue who still chose A say that A was more trustworthy than B. The median voter theorem assumption that did not hold in this election is A.) the issue is single dimensional B.) all voters have single-peaked preferences C.) all voters expressed their true preferences D.) the turnout was not equally weighted
answer
A
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According to Arrow's Impossibility Theorem, it is not possible A.) to have a democratic collective decision-making rule B.) to make decisions concerning collective goods when some of the voters have double-peaked preferences C.) for any collective decision-making rule to comply with all of Arrow's six properties of a good collective decision making rule D.) for collective decision making to be rational
answer
C
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The essential feature for logrolling to be welfare-enhancing is A.) voters' intensity of preferences be considered, not just their rankings B.) Only voters' ranking of preferences be considered C.) there be a market for votes so that preferences can be measured D.) there be a direct democracy rather than a representative democracy
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A
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All of the following are assumptions of the Median Voter Theorem except A.) the candidate closest to the median voter in views wins B.) all voters vote their preferences C.) all voters have single-peaked preferences D.) the issue is single-dimensional
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A
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The dilemma of professional associations that engage in lobbying on behalf of their members is A.) how to attract members when the product of lobbying is a public good B.) their private actions are always at odds with the interests of society C.) lobbying efforts tend to cancel out thus limiting the benefits of group membership D.) the private benefits of membership typically outweigh the collective action therefore is not provided at the appropriate level
answer
A
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According to Arrow's impossibility theorem, it is not possible A.) to have a democratic collective decision-making rule B.) to make decisions concerning collective goods when some voters have double-peaked preferences C.) for any collective decision-making rule to comply with all of Arrow's six properties of a good collective decision making rule D.) for collective decision making to be rational
answer
C
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The existence of external effects of private behavior is a necessary and a sufficient condition for an activity to be placed in the realm of collective choice A.) True B.) False
answer
B
