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26. An understanding of the principles of public sector economics can help us cr

ID: 2815928 • Letter: 2

Question

           

            26.

An understanding of the principles of public sector economics can help us create _____.    Ans:

a.      innovative public policies

b.      a more effective government

c.      a protective government that better shields its citizens from risk

d.      new spending programs

           

27.

The government’s economic programs and policies in the United States _____.

a.      are determined mostly by professional economists

b.      are largely determined by looking at what other countries are doing

c.      are a product of a democratic political system

d.      are largely determined by corporations

           28.

Federal government expenditures in the United States comprise about _____ of total government expenditures.

a.      90 percent

b.      75 percent

c.      60 percent

d.      45 percent

29.

When compared to national defense expenditures, human resources expenditures _____.

a.      declined substantially during the 1980s

b.      have remain stable since the 1950s

c.      are a smaller percentage of GDP

d.      have increased substantially since the mid-1960s

30.

The difference between government receipts and government expenditures is called a _____.

a.      loss

b.      shortfall

c.      deficit

d.      debt

31.

As a percentage of total federal revenues the corporate income tax has _____.

a.      increased since 1960

b.      declined since 1960

c.      fallen during the 1980s, but risen since 1992

d.      remained fairly constant since 1960

32.

As a percentage of total federal revenues, the individual income tax has _____.

a.      increased substantially since 1960

b.      declined substantially since 1960

c.      increased slightly since 1960

d.      declined slightly since 1960

33.

Social insurance revenues _____ come from _____.

a.      primarily; Social Security payroll taxes

b.      primarily, Medicare taxes

c.      primarily; Social Security payroll taxes and Medicare taxes

d.      do not; Social Security payroll taxes

34.

The bulk of federal budget receipts come from ______.

a.      individual income taxes

b.      social insurance revenues

c.      corporation income taxes

d.      excise taxes

35.

When compared with other governments around the world, government spending in the United States as a percentage of GDP_____.

a.      is generally lower than similar countries

b.      is generally higher than similar countries

c.      is about average relative to similar countries

d.      is impossible to compute because of differences between countries

36.

The individual’s budget constraint is _____.

a.      the amount of money she has in the bank

b.      determined by dividing the individuals income by the price of the goods she wants to buy

c.      the maximum amount one good she can consume given her consumption of other goods

d.      a line depicting all the possible budgets an individual could have at various occupations

37.

Which of these actions will occur to the budget constraint when an individual’s income increases?

a.      shifts outward

b.      shifts backward

c.      rotates clockwise

d.      cannot be determined from the information given

38.

The utility maximizing consumption bundle for an individual can be found by locating _____.

a.      the individual’s bliss point

b.      any point on an indifference curve touching the budget constraint

c.      the highest point on an individual’s indifference curve

d.      the point tangent to an individual’s budget constraint

            39.

The market system is based upon _____.

a.      money

b.      voluntary exchange

c.      capitalism

d.      profits

            40.

_____ a cornerstone of the market economy.

a.      Mutually beneficial exchange is

b.      A strong central bank

c.      Monopoly rents are

d.      Government regulation is

41.

As long as the value of additional units of output exceed the opportunity cost of that output, _____.

a.      it will not be produced

b.      it likely will not be produced

c.      it will be produced

d.      it is likely to be produced

            42.

The subject matter of public economics falls into the two general categories of _____ and _____.

a.      public interest; private interest

b.      coercion action; individual liberty

c.      revenue generation; government spending

d.      civilian activities; military duties

            43

The market system is able to allocate resources efficiently because individuals have the right to the output they produce and _____.

a.      freedom of the press

b.      freedom of speech

c.      freedom of movement

d.      freedom of exchange

44.

Government institutions that protect the rights of individuals are ______.

a.      the executive, legislative, and judicial branches of government

b.      federal, state, and local governments

c.      federal agencies such as OSHA, FEC, and the FCC

d.      police, military branches, and the court system

45.

Employing utilitarianism as a measure of the public interest _____.

a.      is inconsistent with the concept of a social welfare function

b.      attempts to minimize the problems associated with market failure

c.      attempts to maximize total utility in a society

d.      avoids comparing individual’s utilities

46.

The Pareto optimality concept is _____.

a.      equivalent to the concept of economic efficiency

b.      equivalent to Pareto superiority

c.      equivalent to utilitarianism

d.      equivalent to cost-benefit analysis

            47.

A property right _____.

a.      entails responsibility

b.      means you can burn trash in your yard whenever you want

c.      is absolute

d.      is completely different than the right to free speech

48.

The Coase Theorem states that _____.

a.     in the absence of transactions costs, the allocation of resource will be independent of property right assignment

b.     in the absence of transactions costs, the allocation of resources will be dependent on property right assignment

c.     with transactions costs, the allocation of resources will be independent of property right assignment

d.     with transactions costs, the allocation of resources will be dependent of property right assignment

49.

The Coase Theorem implies that _____.

a.      absent transactions costs, resources will be efficiently allocated

b.      absent transactions costs, resources will be inefficiently allocated

c.      with significant transactions costs, resources will be efficiently allocated

d.      with significant transactions costs, resources will be inefficiently allocated

50.

Entitlements _____.

a.      give some individuals a command over the economic resources of others

b.      do not require others to take action

c.      are analogous to property rights

d.      have not expanded during the twentieth century

           

            26.

An understanding of the principles of public sector economics can help us create _____.    Ans:

a.      innovative public policies

b.      a more effective government

c.      a protective government that better shields its citizens from risk

d.      new spending programs

           

27.

The government’s economic programs and policies in the United States _____.

a.      are determined mostly by professional economists

b.      are largely determined by looking at what other countries are doing

c.      are a product of a democratic political system

d.      are largely determined by corporations

           28.

Federal government expenditures in the United States comprise about _____ of total government expenditures.

a.      90 percent

b.      75 percent

c.      60 percent

d.      45 percent

29.

When compared to national defense expenditures, human resources expenditures _____.

a.      declined substantially during the 1980s

b.      have remain stable since the 1950s

c.      are a smaller percentage of GDP

d.      have increased substantially since the mid-1960s

30.

The difference between government receipts and government expenditures is called a _____.

a.      loss

b.      shortfall

c.      deficit

d.      debt

31.

As a percentage of total federal revenues the corporate income tax has _____.

a.      increased since 1960

b.      declined since 1960

c.      fallen during the 1980s, but risen since 1992

d.      remained fairly constant since 1960

32.

As a percentage of total federal revenues, the individual income tax has _____.

a.      increased substantially since 1960

b.      declined substantially since 1960

c.      increased slightly since 1960

d.      declined slightly since 1960

33.

Social insurance revenues _____ come from _____.

a.      primarily; Social Security payroll taxes

b.      primarily, Medicare taxes

c.      primarily; Social Security payroll taxes and Medicare taxes

d.      do not; Social Security payroll taxes

34.

The bulk of federal budget receipts come from ______.

a.      individual income taxes

b.      social insurance revenues

c.      corporation income taxes

d.      excise taxes

35.

When compared with other governments around the world, government spending in the United States as a percentage of GDP_____.

a.      is generally lower than similar countries

b.      is generally higher than similar countries

c.      is about average relative to similar countries

d.      is impossible to compute because of differences between countries

36.

The individual’s budget constraint is _____.

a.      the amount of money she has in the bank

b.      determined by dividing the individuals income by the price of the goods she wants to buy

c.      the maximum amount one good she can consume given her consumption of other goods

d.      a line depicting all the possible budgets an individual could have at various occupations

37.

Which of these actions will occur to the budget constraint when an individual’s income increases?

a.      shifts outward

b.      shifts backward

c.      rotates clockwise

d.      cannot be determined from the information given

38.

The utility maximizing consumption bundle for an individual can be found by locating _____.

a.      the individual’s bliss point

b.      any point on an indifference curve touching the budget constraint

c.      the highest point on an individual’s indifference curve

d.      the point tangent to an individual’s budget constraint

            39.

The market system is based upon _____.

a.      money

b.      voluntary exchange

c.      capitalism

d.      profits

            40.

_____ a cornerstone of the market economy.

a.      Mutually beneficial exchange is

b.      A strong central bank

c.      Monopoly rents are

d.      Government regulation is

41.

As long as the value of additional units of output exceed the opportunity cost of that output, _____.

a.      it will not be produced

b.      it likely will not be produced

c.      it will be produced

d.      it is likely to be produced

            42.

The subject matter of public economics falls into the two general categories of _____ and _____.

a.      public interest; private interest

b.      coercion action; individual liberty

c.      revenue generation; government spending

d.      civilian activities; military duties

            43

The market system is able to allocate resources efficiently because individuals have the right to the output they produce and _____.

a.      freedom of the press

b.      freedom of speech

c.      freedom of movement

d.      freedom of exchange

44.

Government institutions that protect the rights of individuals are ______.

a.      the executive, legislative, and judicial branches of government

b.      federal, state, and local governments

c.      federal agencies such as OSHA, FEC, and the FCC

d.      police, military branches, and the court system

45.

Employing utilitarianism as a measure of the public interest _____.

a.      is inconsistent with the concept of a social welfare function

b.      attempts to minimize the problems associated with market failure

c.      attempts to maximize total utility in a society

d.      avoids comparing individual’s utilities

46.

The Pareto optimality concept is _____.

a.      equivalent to the concept of economic efficiency

b.      equivalent to Pareto superiority

c.      equivalent to utilitarianism

d.      equivalent to cost-benefit analysis

            47.

A property right _____.

a.      entails responsibility

b.      means you can burn trash in your yard whenever you want

c.      is absolute

d.      is completely different than the right to free speech

48.

The Coase Theorem states that _____.

a.     in the absence of transactions costs, the allocation of resource will be independent of property right assignment

b.     in the absence of transactions costs, the allocation of resources will be dependent on property right assignment

c.     with transactions costs, the allocation of resources will be independent of property right assignment

d.     with transactions costs, the allocation of resources will be dependent of property right assignment

49.

The Coase Theorem implies that _____.

a.      absent transactions costs, resources will be efficiently allocated

b.      absent transactions costs, resources will be inefficiently allocated

c.      with significant transactions costs, resources will be efficiently allocated

d.      with significant transactions costs, resources will be inefficiently allocated

50.

Entitlements _____.

a.      give some individuals a command over the economic resources of others

b.      do not require others to take action

c.      are analogous to property rights

d.      have not expanded during the twentieth century

Explanation / Answer

26.

An understanding of the principles of public sector economics can help us create a more effective government.

Option (B) is correct answer.

27.

The government’s economic programs and policies in the United States are determined mostly by professional economists.

Option (A) is correct answer.

28.

Federal government expenditures in the United States comprise about 75 Percent of total government expenditures.

Option (B) is correct answer.

29.

When compared to national defense expenditures, human resources expenditures declined substantially during the 1980s.

Option (A) is correct answer.

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