Macroeconomics Private and Public Choice 16th Edition by James D. Gwartney – Test Bank

Macroeconomics Private and Public Choice 16th Edition by James D. Gwartney – Test Bank

Section 6-5

1. When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the
a. tragedy of interest.
b. special-interest effect.
c. unorganized interest effect.
d. shortsightedness effect.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

2. Special-interest legislation is characterized by
a. concentrated costs and concentrated benefits
b. concentrated benefits and widespread costs
c. widespread benefits and widespread costs
d. widespread benefits and concentrated costs
e. zero costs
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

3. Which of the following is the most likely explanation for the imposition of a price floor in the market for corn?
a. Policymakers have studied the effects of the price floor carefully and they recognize that the price floor will improve the efficiency of resource use.
b. Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into enacting the price floor.
c. Buyers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
d. Sellers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

4. An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a
a. special-interest issue.
b. minority application.
c. commons policy.
d. national service.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

5. A special-interest issue is one that
a. allocates the cost of the activity in accordance with the benefits received.
b. benefits a small, well-organized interest group at the expense of taxpayers or consumers.
c. benefits everyone and imposes a cost on everyone.
d. benefits a small, well-organized interest group but makes that group pay for the cost of the program.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

6. Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?
a. Without the farm subsidies, food shortages would result.
b. Subsidies promote the efficient use of agricultural resources.
c. Agricultural interests seek a redistribution of income favoring themselves.
d. The price support programs reduce food costs, which helps the poor.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM

7. If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from
a. potato farmers who own land that wouldn’t be irrigated by the project.
b. taxpayers who would pay for the project.
c. consumers of potatoes who might benefit from an expansion in supply and slightly lower potato prices.
d. potato farmers who own the land to be irrigated.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
NATIONAL STANDARDS: United States – BUSPROG: Analytic – BUSPROG: Analytic
STATE STANDARDS: United States – AK – DISC: The role of government
TOPICS: When the Political Process Works Poorly
KEYWORDS: Bloom’s: Comprehension
DATE CREATED: 5/19/2016 3:08 PM
DATE MODIFIED: 5/19/2016 3:08 PM