Hardest Exam On Economics: Quiz!

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  • 1/42 Questions

    Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are

    • Rationally ignorant.
    • Not acting in their own best interests.
    • Members of special-interest groups.
    • Shortsighted.
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Hardest Exam On Economics: Quiz! - Quiz
About This Quiz

Can you pass the most challenging exam on economics? For this quiz, you should recognize what public choice refers to, what is a public choice theorist, what tends to happen with the left side in politics, and would a person take the right amount of time and consideration when learning about the issues of the United States Senate. This economics quiz has a political angle to it. You must take this quiz.

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  • 2. 

    In a political election, a candidate whose positions are on the left will tend to be labeled __________ by his or her opponent.

    • Too far to the left

    • Too far to the right

    • Too much of a middle-of-the-roader

    • An unknown quantity

    Correct Answer
    A. Too far to the left
    Explanation
    When a candidate's positions are on the left, their opponent may label them as "too far to the left." This suggests that the opponent believes the candidate's views are extreme or radical, potentially alienating voters who are more moderate or conservative. The opponent may use this label as a way to discredit the candidate and appeal to voters who prefer a more centrist approach.

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  • 3. 

      Individuals Dollar benefits to individuals Tax levied on individuals Vote Milton $325 $300 ___ Maria $315 $300 ___ Jaime $305 $300 ___ Maynard $245 $300 ___ Kenneth $150 $300 ___ Refer to Exhibit 32-3. The exhibit shows the breakdown of benefits and costs for a five-person community considering whether to purchase a $1,500 statue of Adam Smith to put in the center of the public square. If a simple majority voting determines the outcome, the statue will

    • Be purchased even though total costs exceed total benefits.

    • Be purchased because the total benefits are greater than total costs.

    • Not be purchased even though total benefits exceed total costs.

    • Not be purchased because the total costs are greater than the total benefits.

    • None of the above

    Correct Answer
    A. Be purchased even though total costs exceed total benefits.
    Explanation
    The correct answer is "be purchased even though total costs exceed total benefits." This can be inferred from the given information in the exhibit. The total dollar benefits for the individuals are all $300, while the total cost of the statue is $1,500. Even though the total costs exceed the total benefits, the question states that a simple majority voting determines the outcome. Therefore, the statue will still be purchased despite the imbalance between costs and benefits.

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  • 4. 

    During an election, a candidate who is not doing as well in the polls as his or her opponent will

    • Modify his or her position so that it is more like that of his or her opponent.

    • Modify his or her position so that it is less like that of his or her opponent.

    • Become more specific in discussing the issues.

    • Label his or her opponent as a middle-of-the-roader.

    Correct Answer
    A. Modify his or her position so that it is more like that of his or her opponent.
    Explanation
    During an election, a candidate who is not doing as well in the polls as his or her opponent will modify his or her position so that it is more like that of his or her opponent. This strategy is known as "modifying positions to appeal to a broader audience" or "shifting towards the center." By aligning their stance with their opponent's, the candidate hopes to attract voters who may be undecided or leaning towards the opponent. This tactic aims to increase the candidate's appeal and improve their chances of winning the election.

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  • 5. 

    Public choice is concerned with:

    • Relative prices.

    • Government decision making.

    • Marketing techniques.

    • Consumer surveying.

    Correct Answer
    A. Government decision making.
    Explanation
    Public choice is a field of study that focuses on analyzing the decision-making processes within government systems. It examines how individuals and groups within the government make choices, allocate resources, and pursue their own interests. This includes studying topics such as voting behavior, public policies, and the influence of special interest groups. Therefore, the correct answer is government decision making.

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  • 6. 

    There is evidence that __________ were the main lobbyists behind the passage of the Factory Acts which put restrictions on women and children working in early 19th century England.

    • Male workers

    • Female workers

    • Child-care advocates

    • Factory owners

    Correct Answer
    A. Male workers
    Explanation
    Male workers were the main lobbyists behind the passage of the Factory Acts which put restrictions on women and children working in early 19th century England. This can be inferred from the historical context of the time, where male workers, who were typically the primary breadwinners, sought to protect their own job opportunities and wages by advocating for legislation that limited the employment of women and children in factories. By reducing the labor supply, they aimed to ensure better working conditions and higher pay for themselves.

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  • 7. 

    Public choice theorists assert that persons who change jobs from, say, a government position to a business position, sometimes alter their work behavior and attitudes because:

    • They want to fit in and be liked by their fellow workers.

    • They are acting rationally by weighing the costs and benefits of certain behavior in different work settings.

    • They feel that if they change jobs, they should also change their behavior.

    • Their new boss tells them it is in their best interest.

    Correct Answer
    A. They are acting rationally by weighing the costs and benefits of certain behavior in different work settings.
    Explanation
    Public choice theorists argue that individuals who switch from a government position to a business position make changes in their work behavior and attitudes because they are rational actors. They carefully consider the costs and benefits associated with certain behaviors in different work settings. This implies that they make calculated decisions based on their own self-interest, rather than simply trying to fit in or following instructions from their new boss.

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  • 8. 
    Refer to Exhibit 32-2-(b). Two candidates are competing for an electorate consisting of 3 voters labeled A, B, and C shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s) - ProProfs

    Refer to Exhibit 32-2-(b). Two candidates are competing for an electorate consisting of 3 voters labeled A, B, and C shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s)

    • Of voter B.

    • Of voters C and A, respectively.

    • Halfway between voter C and voter A.

    • Halfway between voter B and voter A.

    • Halfway between voter C and voter B, for one candidate, and of voter A for the other.

    Correct Answer
    A. Of voter B.
    Explanation
    The median voter theory suggests that candidates will assume the ideological position of the median voter, who is the voter that falls exactly in the middle when voters are arranged in order of their ideological stands. In this case, the ideological positions of the voters are arranged as A, B, and C. Since voter B is the middle voter, the correct answer is that candidates will assume the ideological position of voter B.

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  • 9. 

    One implication of the median voter model is that a candidate is likely to label himself __________ and his or her opponent as __________.

    • Moderate; too far right or too far left (whichever makes more sense)

    • A member of one of the political wings; moderate or mainstream

    • As a member of the political right; moderate

    • As a member of the political left; moderate

    • None of the above

    Correct Answer
    A. Moderate; too far right or too far left (whichever makes more sense)
    Explanation
    In the median voter model, the candidate is likely to label himself as moderate in order to appeal to the largest number of voters who fall around the center of the political spectrum. By positioning themselves as moderate, the candidate can attract voters from both the right and left wings. In contrast, the candidate is likely to label his or her opponent as too far right or too far left, depending on which makes more sense, in order to highlight their extreme positions and differentiate themselves as the more moderate option. This strategy allows the candidate to appeal to the median voter and maximize their chances of winning the election.

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  • 10. 

    Refer to Exhibit 32-4.  Suppose that producer of this good engage in rent-seeking which results in the government imposing a price floor of P2.  The loss of consumers’ surplus that occurs due to the price floor is

    • B + C

    • A + B + C + D + E

    • A + B + C

    • C + E

    • A

    Correct Answer
    A. B + C
    Explanation
    When the government imposes a price floor of P2 due to rent-seeking by the producer, it means that the price cannot fall below P2. This results in a surplus of the good, as the quantity supplied exceeds the quantity demanded at that price. The loss of consumer surplus occurs because consumers are willing to pay a higher price (P1) for the good, but they are forced to pay the higher price of P2. The loss of consumer surplus is represented by the areas B and C in the exhibit, as these areas represent the difference between the price consumers are willing to pay (P1) and the price they actually have to pay (P2).

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  • 11. 

    In a simple majority vote on a public project,

    • The project will never be undertaken if the costs exceed the benefits.

    • The project may be undertaken even though the total costs exceed the total benefits.

    • The intensity of individual preferences is taken into account.

    • The project will always be undertaken if the total benefits exceed the total costs.

    Correct Answer
    A. The project may be undertaken even though the total costs exceed the total benefits.
    Explanation
    In a simple majority vote on a public project, the project may be undertaken even though the total costs exceed the total benefits. This is because the decision is based on the number of votes in favor of the project, rather than the cost-benefit analysis. Even if the costs outweigh the benefits, if the majority of voters support the project, it can still be undertaken.

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  • 12. 

    The answer is: "rational ignorance." What is the question?

    • Why do special interest groups lobby politicians?

    • What causes a candidate in a two-person political race to take polls?

    • What explains why voters often know very little about the candidates and the issues?

    • What motivates the free rider?

    Correct Answer
    A. What explains why voters often know very little about the candidates and the issues?
    Explanation
    The answer "rational ignorance" explains why voters often know very little about the candidates and the issues. Rational ignorance refers to the rational decision made by voters to remain uninformed about political candidates and issues because the cost of acquiring information outweighs the expected benefits. Voters may believe that their individual vote will not significantly impact the outcome of an election, leading them to prioritize other activities over acquiring political knowledge. As a result, voters may choose to remain ignorant about candidates and issues, which can have implications for the democratic process.

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  • 13. 

    Refer to Exhibit 32-4.  Suppose that producer of this good engage in rent-seeking which results in the government imposing a price floor of P2.  The gain in producers’ surplus that occurs due to the price floor is

    • B + C

    • A + B + C + D + E

    • A + B + C

    • C + E

    • B

    Correct Answer
    A. B + C
    Explanation
    Rent-seeking refers to the actions taken by individuals or groups to secure economic gains through the manipulation of government policies or regulations. In this case, the producer of the good engages in rent-seeking, which leads the government to impose a price floor of P2.

    The gain in producers' surplus due to the price floor can be determined by looking at the area between the supply curve and the price floor. In Exhibit 32-4, this area is represented by the triangle B + C. Therefore, the correct answer is B + C. This represents the additional economic benefit that producers receive as a result of the price floor.

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  • 14. 

    (1) (2) (3)   Individual Dollar benefits to individual Tax levied on individual A $333 $180 B $175 $180 C $160 $180 D $150 $180 Refer to Exhibit 32-l. The exhibit shows the breakdown of benefits and costs for a four-person town of a proposed $720 addition in books to the public library. The members of the community get to vote on the project at hand, and the majority rules. Given the data, the $720 will

    • Be spent, even though the total benefits are less than the total costs.

    • Not be spent, since more persons are against the project than are for it.

    • Be spent, since the total benefits are greater than the total costs.

    • Not be spent, since the total benefits are less than the total costs.

    Correct Answer
    A. Not be spent, since more persons are against the project than are for it.
    Explanation
    Based on the information provided in the exhibit, the majority of the community members are against the proposed $720 addition to the public library. Therefore, the project will not be spent, as more persons are against it than are for it. The total benefits being less than the total costs is not the determining factor in this case.

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  • 15. 

    Special-interest groups are subsets of __________ that hold (usually) intense preferences for or against a particular government service, activity, or policy.

    • The general population

    • Bureaucrats

    • Elected officials

    • Candidates for political office

    • All of the above

    Correct Answer
    A. The general population
    Explanation
    Special-interest groups are subsets of the general population that hold intense preferences for or against a particular government service, activity, or policy. These groups are made up of individuals who share common interests or goals and advocate for their specific interests to be represented in government decisions. They often engage in lobbying, campaigning, and other forms of activism to influence policies and decisions that align with their preferences.

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  • 16. 

    According to public choice theorists, people in the market sector and people in the public sector behave differently because:

    • People in the two sectors have different motives.

    • The two sectors have different institutional arrangements.

    • Government employees do not act in their own self-interest.

    • There are economies of scale in the market sector.

    Correct Answer
    A. The two sectors have different institutional arrangements.
    Explanation
    According to public choice theorists, the reason why people in the market sector and people in the public sector behave differently is because the two sectors have different institutional arrangements. This means that the rules, regulations, and structures that govern the market sector are different from those that govern the public sector. These institutional arrangements can shape the incentives and behaviors of individuals within each sector, leading to different motives and actions.

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  • 17. 

    Public choice refers to:

    • The decisions and decision-making processes that individuals go through to solve public problems.

    • Political decisions made in the interest of the public at large.

    • The application of economic principles and tools to public-sector decision making.

    • The process that individuals undergo to decide what goods and services they will purchase and consume.

    • The process that individuals undergo to decide whether or not they will pursue a career government service.

    Correct Answer
    A. The application of economic principles and tools to public-sector decision making.
    Explanation
    Public choice refers to the application of economic principles and tools to public-sector decision making. This means that public choice involves analyzing and understanding how individuals and groups make decisions that affect the public, such as government policies and regulations. It involves studying factors such as incentives, costs, benefits, and trade-offs in order to make informed decisions that maximize societal welfare. By applying economic principles, public choice theory aims to improve the efficiency and effectiveness of public-sector decision making.

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  • 18. 

    Logrolling refers to       

    • Choosing political platforms to appeal to special interests.

    • Trading votes to gain support for legislation.

    • Choosing political platforms to appeal to the "middle-of-the-road" voter.

    • Gathering votes by pretending to support policies that appeal to voters.

    • C and d

    Correct Answer
    A. Trading votes to gain support for legislation.
    Explanation
    Logrolling refers to the practice of trading votes to gain support for legislation. This means that politicians make agreements with each other to vote in favor of each other's proposed bills or policies, in exchange for receiving support for their own legislative agenda. This practice is often used to build coalitions and pass legislation that may not have enough support on its own. By engaging in logrolling, politicians are able to leverage their voting power and negotiate with their colleagues to achieve their policy goals.

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  • 19. 

    According to public choice theorists, people in the market sector and people in the public sector have __________, and (but) sometimes act differently because of different __________ arrangements in the two sectors.

    • Different motives; institutional

    • The same motives; institutional

    • Different views of politics; equilibrium

    • The same motives; equilibrium

    • None of the above

    Correct Answer
    A. The same motives; institutional
    Explanation
    Public choice theorists argue that individuals in both the market sector and the public sector have the same motives, which is self-interest. However, they may act differently due to the different institutional arrangements in these two sectors. These institutional arrangements can include factors such as the presence of regulations, incentives, and accountability mechanisms, which can influence individuals' behavior and decision-making. Therefore, individuals may have the same underlying motives but may be constrained or influenced by the institutional context in which they operate.

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  • 20. 

    Competition for votes between two political parties will cause those parties to

    • Produce quite different policy proposals.

    • Have very similar policy proposals.

    • Find ways to clearly distinguish themselves in order to give voters a clear choice.

    • A and c

    • None of the above

    Correct Answer
    A. Have very similar policy proposals.
    Explanation
    Competition for votes between two political parties will cause those parties to have very similar policy proposals. When parties are competing for the same pool of voters, they may try to appeal to a broad range of people by adopting similar policy positions. This is especially true in a two-party system where both parties need to attract a majority of voters to win elections. By having similar policy proposals, parties aim to minimize the differences between them and make it harder for voters to distinguish between them, ultimately hoping to attract a larger share of the electorate.

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  • 21. 

    In a simple majority vote, the losses to the losers are greater than the gains to the winners. It follows that the

    • Outcome of the vote is efficient.

    • Outcome of the vote is inefficient.

    • Outcome of the vote will be nullified (most likely by the Courts).

    • Vote has generated net benefits.

    • None of the above

    Correct Answer
    A. Outcome of the vote is inefficient.
    Explanation
    In a simple majority vote, the losses to the losers are greater than the gains to the winners. This implies that the outcome of the vote is inefficient because the overall benefits do not outweigh the overall costs. The losers suffer more than the winners gain, indicating an inefficient distribution of resources or decision-making.

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  • 22. 

    A public choice theorist would argue that:

    • There is no such thing as a "good" or "bad" person.

    • It does not matter whether a person is "good" or "bad."

    • There are both "good" and "bad" persons, and some of each work for government and for business.

    • Generally "good" persons work for government because they want to serve the public, and generally "bad" persons work for business because they are greedy and want to make profits at the expense of consumers.

    • Generally "bad" persons work for government because they want to serve the needs of special-interest groups, and generally "good" persons work for business because they want to produce goods that people consume.

    Correct Answer
    A. There are both "good" and "bad" persons, and some of each work for government and for business.
    Explanation
    A public choice theorist would argue that there are both "good" and "bad" persons, and some of each work for government and for business. This is because public choice theory assumes that individuals act in their own self-interest, regardless of their occupation or position. It recognizes that people have different motivations and incentives, and that these can influence their behavior in both the public and private sectors. Therefore, it rejects the notion that one sector attracts only "good" or "bad" individuals, and acknowledges the presence of both types in both government and business.

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  • 23. 

    Refer to Exhibit 32-4.  At the market equilibrium price of the good, consumers’ surplus is the area.

    • D + E

    • A + B + C + D + E

    • A + B + C

    • C + E

    • None of the above

    Correct Answer
    A. A + B + C
    Explanation
    At the market equilibrium price, consumers' surplus is the area A + B + C. This is because consumers' surplus represents the difference between the maximum price that consumers are willing to pay for a good and the actual price they pay. In this case, the area A + B + C represents the value that consumers receive from purchasing the good at the equilibrium price, which is above their willingness to pay. Therefore, it is the correct answer.

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  • 24. 

    Refer to Exhibit 32-4.  At the market equilibrium price of the good, producers’ surplus is the area.

    • D + E

    • A + B + C + D + E

    • A + B + C

    • C + E

    Correct Answer
    A. D + E
    Explanation
    At the market equilibrium price of the good, producers' surplus is the area represented by D + E. This is because producers' surplus is the difference between the price at which producers are willing to supply the good and the actual market price. The area D + E represents the amount of profit that producers are making above and beyond their costs, indicating their surplus in the market.

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  • 25. 

    (1) (2) (3)   Individual Dollar benefits to individual Tax levied on individual A $333 $180 B $175 $180 C $160 $180 D $150 $180 Refer to Exhibit 32-1. The exhibit shows the breakdown of benefits and costs for a four-person town of a proposed $720 addition in books to the public library. How will each of the four persons, A-D, vote? (The first answer in the list is how person A would vote, the second is how person B would vote, and so on, so that “for” indicates that the voter would be in favor of having the additional books purchased by the library.)

    • For; for; for; for

    • Against; for; against; against

    • For; against; against; against

    • For; against; for; for

    • None of the above

    Correct Answer
    A. For; against; against; against
    Explanation
    Based on the breakdown of benefits and costs, person A would vote for the proposed addition in books to the public library because the individual dollar benefits ($333) outweigh the tax levied on the individual ($180). Person B would vote against because the individual dollar benefits ($175) are less than the tax levied on the individual ($180). Person C and D would also vote against for the same reason.

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  • 26. 

    Would we expect the "average" person to take more time to learn about the car he or she is considering purchasing or about the issues in the upcoming U.S. Senate race in his or her state?

    • The Senate race, because it is critical that we elect the right people to government.

    • The car, but there is no rational reason for this.

    • The Senate race, because the person who is elected senator today may become president tomorrow.

    • The car, because a mistake here can potentially cause him or her more harm on a day-to-day basis; in addition, a person is unlikely to be able to determine the outcome of a Senate race.

    Correct Answer
    A. The car, because a mistake here can potentially cause him or her more harm on a day-to-day basis; in addition, a person is unlikely to be able to determine the outcome of a Senate race.
    Explanation
    The average person would be expected to take more time to learn about the car he or she is considering purchasing rather than the issues in the upcoming U.S. Senate race in his or her state. This is because making a mistake in choosing a car can have more immediate and tangible consequences in the person's daily life. On the other hand, the outcome of a Senate race is unlikely to be influenced by an individual's knowledge or understanding, making it less crucial for the average person to spend significant time learning about it.

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  • 27. 

    If it is assumed that people vote for the candidate who comes closer to matching their own views, to win votes in a two-person race

    • One candidate will move to the far right of the political spectrum while the other moves to the far left.

    • One candidate will move between the middle and far right end of the political spectrum while the other moves between the middle and the far left end.

    • Both candidates will move to the far right end of the political spectrum.

    • Both candidates will move to the far left end of the political spectrum.

    • Both candidates will move toward the middle of the political spectrum.

    Correct Answer
    A. Both candidates will move toward the middle of the political spectrum.
    Explanation
    In a two-person race where people vote for the candidate who matches their own views, it is rational for both candidates to move toward the middle of the political spectrum. By doing so, they can appeal to a larger number of voters who may have moderate or centrist views. Moving to the extremes of the spectrum would limit their appeal and potentially alienate voters who do not align with those extreme positions. Therefore, it is strategic for both candidates to position themselves closer to the middle in order to maximize their chances of winning votes.

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  • 28. 

    Most government bureaus provide services in a setting that is similar to which market structure?

    • Perfect competition

    • Monopolistic competition

    • Oligopoly

    • Monopoly.

    Correct Answer
    A. Monopoly.
    Explanation
    Government bureaus typically operate in a monopolistic market structure where they are the sole providers of certain services or goods. They often have exclusive control or authority over the provision of these services, leading to limited or no competition from other firms. This allows them to set prices and make decisions without being influenced by market forces. Therefore, the correct answer is monopoly.

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  • 29. 

    Government bureaus and bureaucrats are not as likely to try to please their "customers" as are private firms. Why?

    • Government bureaus usually employ more employees than private firms.

    • There are fewer government bureaus than private firms.

    • Government bureaus do not face competition, private firms do.

    • Government bureaus provide more nearly essential services than private firms.

    • None of the above

    Correct Answer
    A. Government bureaus do not face competition, private firms do.
    Explanation
    Government bureaus do not face competition, unlike private firms. Private firms operate in a competitive market where they need to please their customers in order to attract and retain them, as customers have the option to choose among different firms. On the other hand, government bureaus often have a monopoly or near-monopoly on the services they provide, so they do not face the same pressure to please their "customers" as private firms do.

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  • 30. 

    (1) (2) (3)   Individual Dollar benefits to individual Tax levied on individual A $333 $180 B $175 $180 C $160 $180 D $150 $180 Refer to Exhibit 32-1.  The exhibit shows the breakdown of benefits and costs for a four-person town considering the purchase of an additional $720 worth of books for the public library.  If simple majority voting determines the outcome, the books will

    • Be purchased because more persons are for it than against it.

    • Be purchased because the total benefits are greater than the total costs.

    • Not be purchased even though total benefits exceed total costs.

    • Not be purchased because the total costs are greater than the total benefits.

    Correct Answer
    A. Not be purchased even though total benefits exceed total costs.
    Explanation
    The correct answer is "not be purchased even though total benefits exceed total costs." This is because even though the total benefits ($333 + $175 + $160 + $150 = $818) exceed the total costs ($180), the decision is based on simple majority voting. Since there are only two individuals (B and C) who benefit from the purchase, and two individuals (A and D) who do not benefit from it, the majority is against the purchase. Therefore, the books will not be purchased.

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  • 31. 

    Congressman A promises to vote for a bill that Congressmen B and C are sponsoring, and in return both B and C promise to vote for a future bill that A is sponsoring. This practice is called

    • Cutting "red tape."

    • Chasing the median voter.

    • Rational ignorance.

    • Logrolling.

    Correct Answer
    A. Logrolling.
    Explanation
    Logrolling is a practice in politics where politicians make agreements to support each other's policies or bills in exchange for support for their own policies or bills. In this scenario, Congressman A promises to vote for a bill sponsored by Congressmen B and C, and in return, B and C promise to vote for a future bill sponsored by A. This is a classic example of logrolling, as each politician is exchanging support for their own agenda.

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  • 32. 

    Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate with Japan a voluntary export restraint agreement that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created" in the U.S. automobile industry. Refer to Situation 32-l. This episode can be seen as an instance of  

    • Rational ignorance.

    • Logrolling

    • Special-interest politics.

    • A zero sum game.

    Correct Answer
    A. Special-interest politics.
    Explanation
    The episode described in the situation is an example of special-interest politics because it involves the U.S. automobile industry using its influence to negotiate a trade agreement with Japan that benefits their own interests. This agreement resulted in higher prices for Japanese cars and the creation of new jobs in the U.S. automobile industry, demonstrating how special interest groups can use their power to shape government policies in their favor.

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  • 33. 

    Rational ignorance refers to voter-citizens choosing to be uninformed about politics and government on an individual basis because

    • Of apathy.

    • Of ignorance.

    • Of laziness.

    • They believe the benefits of becoming informed are greater than the costs.

    • They believe the benefits of becoming informed are less than the costs.

    Correct Answer
    A. They believe the benefits of becoming informed are less than the costs.
    Explanation
    Rational ignorance refers to the decision made by voter-citizens to remain uninformed about politics and government due to the belief that the benefits of becoming informed are less than the costs. This means that individuals perceive the effort and time required to become informed as outweighing the potential benefits they would gain from being knowledgeable about politics and government. As a result, they choose to remain uninformed.

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  • 34. 

    An example of a government bureaucrat is

    • A U.S. senator.

    • A worker at the Department of Motor Vehicles.

    • The head of the National Park Service.

    • All of the above

    • B and c

    Correct Answer
    A. B and c
    Explanation
    The correct answer is "b and c". This is because a worker at the Department of Motor Vehicles and the head of the National Park Service are both examples of government bureaucrats. A government bureaucrat is someone who works in a government agency or department and is responsible for implementing and enforcing policies and regulations. Both the Department of Motor Vehicles and the National Park Service are government agencies, and the workers and heads of these agencies can be considered government bureaucrats.

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  • 35. 
    Refer to Exhibit 32-2-(c). Two candidates are competing for an electorate consisting of 11 voters labeled A-K shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s) - ProProfs

    Refer to Exhibit 32-2-(c). Two candidates are competing for an electorate consisting of 11 voters labeled A-K shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s)

    • Of voters K and G, respectively.

    • Of voters H and J, respectively.

    • Of voters I and A, respectively.

    • Of voter E.

    Correct Answer
    A. Of voter E.
    Explanation
    The median voter theory suggests that candidates will position themselves at the ideological center of the electorate in order to attract the most voters. In this case, the median voter is voter E, as they are located in the middle of the ideological spectrum. Therefore, the correct answer is that candidates will assume the ideological position of voter E.

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  • 36. 

      Individuals Dollar benefits to individuals Tax levied on individuals Vote Milton $325 $300 ___ Maria $315 $300 ___ Jaime $305 $300 ___ Maynard $245 $300 ___ Kenneth $150 $300 ___ Refer to Exhibit 32-3. The exhibit shows the breakdown of benefits and costs for a five-person community considering whether to purchase a $1,500 statue of Adam Smith to put in the center of the public square. How will each of the five persons (from Milton to Kenneth) vote?

    • Against, against, against, for, for

    • Against, against, for, for, for

    • Against, for, for, for, for

    • For, for, for, against, against

    • For, for, against, against, against

    Correct Answer
    A. For, for, for, against, against
    Explanation
    Based on the given information, each person will vote based on whether the dollar benefits they receive outweigh the tax levied on them. Milton, Maria, and Jaime will vote in favor of purchasing the statue because the dollar benefits they receive ($325, $315, and $305 respectively) are higher than the tax levied on them ($300). Maynard and Kenneth, on the other hand, will vote against purchasing the statue because the dollar benefits they receive ($245 and $150 respectively) are lower than the tax levied on them ($300). Therefore, the correct answer is "for, for, for, against, against".

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  • 37. 

    Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate with Japan a voluntary export restraint agreement that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created" in the U.S. automobile industry. Refer to Situation 32-1. Which of the following arguments is least likely to have been used by the U.S. auto industry to argue for import quotas?

    • If the quantity of low-priced import cars is not restricted, foreigners will overtake the U.S. car market.

    • A healthy auto industry is vital to our national security.

    • If import quotas are in place, our profits will increase by about $300 per vehicle.

    • Japan is protecting its market, and so should we; all we want is a level playing field.

    Correct Answer
    A. Japan is protecting its market, and so should we; all we want is a level playing field.
    Explanation
    The U.S. auto industry is least likely to have used the argument that "Japan is protecting its market, and so should we; all we want is a level playing field" to argue for import quotas. This is because the voluntary export restraint agreement was already negotiated with Japan, indicating that Japan was willing to limit its exports to the U.S. market. Therefore, the argument that Japan is protecting its market would not have been relevant in this context.

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  • 38. 

    Refer to Exhibit 32-4.  If producers of this good engage in rent-seeking which results in the government imposing a price floor of P2, then consumers’ surplus ends up being an area.

    • D + E

    • A + B + C + D + E

    • A + B + C

    • C + E

    • A

    Correct Answer
    A. A
    Explanation
    If producers engage in rent-seeking and the government imposes a price floor of P2, it means that the price of the good cannot go below P2. This will result in a decrease in consumer surplus. The area A represents the consumer surplus before the price floor is imposed. However, after the price floor is imposed, consumers will have to pay a higher price, resulting in a decrease in consumer surplus. Therefore, the correct answer is A.

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  • 39. 
    Refer to Exhibit 32-2-(a). Two candidates are competing for an electorate consisting of 9 voters labeled A-I shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s) - ProProfs

    Refer to Exhibit 32-2-(a). Two candidates are competing for an electorate consisting of 9 voters labeled A-I shown positioned with respect to their ideological stands on issues. The median voter theory would predict that candidates will assume the ideological position(s)

    • Of voter A.

    • Halfway between that of voter G and that of voter A.

    • Of voter C.

    • Of voter B.

    • Of voter G and voter I, respectively.

    Correct Answer
    A. Of voter B.
    Explanation
    The median voter theory suggests that candidates will adopt the ideological position of the median voter, who is the voter that falls in the middle when all voters are arranged in order of their ideological stands. In this case, when we arrange the voters from left to right (A-I), the median voter is voter B. Therefore, according to the median voter theory, the candidates will assume the ideological position of voter B.

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  • 40. 

    Three persons, A, B, and C, will use a simple majority vote to determine whether some good will be purchased. Each person's "tax share" of the purchase price of the good will be $25. Person A receives $30 worth of benefits from the good, person B receives $26 worth of benefits from the good, and person C receives $2 worth of benefits from the good. It follows that __________ person(s) will vote for the good, __________ person(s) will vote against it, and that the outcome is __________.

    • One; two; inefficient

    • Two; one; efficient

    • One; two; efficient

    • Two; one; inefficient

    Correct Answer
    A. Two; one; inefficient
    Explanation
    Based on the information given, person A receives the highest benefit from the good ($30), followed by person B ($26), and person C ($2). Since each person's tax share is $25, both person A and person B will vote for the good because the benefits they receive exceed the cost. On the other hand, person C will vote against the good because the benefit they receive is less than the cost. Therefore, two persons (A and B) will vote for the good, one person (C) will vote against it, and the outcome is inefficient because the total benefits do not justify the cost.

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  • 41. 

    Special-interest groups are subsets of the general population that

    • Attempt to influence government officials for the benefit of the general population.

    • Choose to be rationally ignorant because they are interested only in things that the government is not concerned with.

    • Are on the fringes of the political spectrum.

    • A and c

    • None of the above

    Correct Answer
    A. None of the above
    Explanation
    Special-interest groups are subsets of the general population that attempt to influence government officials for their own specific interests, rather than for the benefit of the general population as a whole. This is different from the first option, which incorrectly states that they aim to benefit the general population. The second option is also incorrect, as special-interest groups are not necessarily rationally ignorant, but rather focused on their own specific concerns. The third option is also incorrect, as special-interest groups can be found across the political spectrum, not just on the fringes. Therefore, the correct answer is "none of the above".

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  • 42. 

    Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate with Japan a voluntary export restraint agreement that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created" in the U.S. automobile industry.   Refer to Situation 32-l. At the time the total yearly salary (including all the benefits) of the average auto worker was no more than $50,000 per year, and the cost per job saved was estimated at $160,000 per worker per year. We can conclude that

    • Import quotas are a cost-efficient way of saving jobs.

    • The U.S. auto industry, through its lobbying efforts, managed to promote the general public interest.

    • The net social benefits of import quotas were positive.

    • All of the above

    • None of the above

    Correct Answer
    A. None of the above
    Explanation
    The correct answer is "none of the above." This is because the cost per job saved was estimated at $160,000 per worker per year, which is significantly higher than the average yearly salary of the average auto worker at $50,000. Therefore, import quotas are not a cost-efficient way of saving jobs. Additionally, the increase in prices of both Japanese and U.S. cars suggests that the net social benefits of import quotas were not positive. The statement also does not provide any evidence to support the claim that the U.S. auto industry promoted the general public interest through its lobbying efforts.

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Quiz Review Timeline (Updated): Mar 22, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

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  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 26, 2012
    Quiz Created by
    Uisnech
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