Voters who do not have single-peaked preferences _____. a. prefer outcomes closer to their most preferred outcome to outcomes further away b. do not necessarily prefer outcomes closer to their most preferred outcome to outcomes farther away c. prefer all outcomes the same d. are unable to weigh one outcome against another outcome, regardless of […]
Value-added taxes were introduced in the European Union _____. a. to get rid of inefficient transaction taxes b. to harmonize tax structures among nations c. to make taxes more equitable d. all of the above e. a and b ANSWER e
One advantage of a value added tax over a sales tax is _____. a. that it does not require that retail and wholesale purchases be distinguishable b. it is easier to compute c. it is easier for taxpayers to see and compute d. it is easier to collect ANSWER a
While cyclical majorities can lead to unstable outcomes, they generally do not because of _____. a. rational ignorance b. double-peaked preferences c. political institutions d. majority rule ANSWER c
Cyclical majorities can occur when _____. a. voters have single-peaked preferences b. voters are rationally ignorant c. voters are irrationally ignorant d. voters do not have single-peaked preferences ANSWER d
One problem with traditional health insurance plans is _____. a. people have little choice over physicians b. it has eliminated employer-provided health care c. doctors have little incentive to economize d. patients spent too much time scrutinizing their bills ANSWER c
Why might a VAT be more popular politically than a retail sales tax? a. Its transparency appeals to voters. b. Its lack of transparency makes it easier to misunderstand its effects. c. It is more efficient per dollar raised. d. It is more consistent with the benefit principle of taxation. ANSWER b
Under comprehensive health insurance the level of output is determined where _____. a. supply equals demand b. demand equals zero c. supply is of unitary elasticity d. the insurer sets it ANSWER b
A _____ is when no one outcome can defeat all others by majority rule. a. cyclical majority b. single-peaked preference c. political business cycle d. political institution ANSWER a
If Option A costs $40 and yields 20 units of output and Option B costs $50 and yields 30 units of output, A) Option B and Option A are equally economically efficient. B) Option B is economically efficient relative to Option A. C) Option A is economically efficient relative to Option B. D) It is […]
