The benefit principle states that_____. a. people who benefit from the rule of law should pay taxes b. people who benefit from Social Security should voter for it c. people who benefit from a government activity should pay for it in proportion to their wealth d. people who benefit from a government activity should be […]
Which of the following is not a feature of an efficient tax? a. An efficient tax should minimize the excess burden of taxation. b. An efficient tax should have low compliance costs. c. An efficient tax should be equitable. d. An efficient tax should be easy to monitor and administer. ANSWER c
A key difference between clubs and government is _____. a. government requires everyone within its jurisdiction to participate b. government acts on behalf of the poor c. government is not frivolous, like most clubs d. government requires collective action ANSWER a
It is clear that government provision of education is not necessary _____. a. because of the existence of private schools b. from the size of positive externalities c. because of the lack of asymmetrical information between parents and teachers d. because education externalities are negatively inframarginal ANSWER a
Translating the preferences of each individual into the preferences of the group is _____. a. a challenge faced only by clubs b. a challenge faced by all collective decision making organizations c. inherent in all decision making d. a challenge faced only by government ANSWER b
The equilibrium level of regulation is where the marginal political benefits to the special interests are equal to the marginal political costs of the foregone regulation. a. True b. False ANSWER a
The benefit principle views _____. a. a tax as the price that is paid for a government-supplied activity b. all government activity as beneficial c. all taxes as being beneficial if they are spent in the public interest d. all Pareto-efficient moves as beneficial ANSWER a
The Coase Theorem does not imply which of the following? a. Resources will be allocated efficiently in the absence of transactions costs. b. Resources will move to their highest valued use in there are no transactions costs. c. The initial allocation of property rights does not matter to the parties involved. d. The allocation of […]
In 1940 _____ of the population over 25 had a college degree. a. less than 5 percent b. around 10 percent c. around 15 percent d. more than 20 percent ANSWER a
Helping the poor is not necessarily the same thing as promoting greater equality. a. True b. False ANSWER a
