2.  Asmall community currently taxes residents to provide monthlycommunity concerts. Voter A currently pays a tax per concert equalto $50 per month. This voter receives a marginal benefit of $75 atthe current political equilibrium number of concerts per month.Voter A:
a.   is the medianvoter.
b.  would be made betteroff if the number of monthly concerts were increased.
c.   would be madeworse off if the number of monthly concerts were increased.
d.  has achieved hismost-preferred political outcome for monthly concerts.
3.  If allvoters have single-peaked preferences, then under majorityrule:
a.   cycling ofpolitical outcomes can occur.
b.  a political equilibriumexists.
c.   the politicalequilibrium is the median most-preferred outcome.
d.  both (b) and (c)
4.  VoterA will normally vote in favor of one security guard per weekbecause his marginal benefit is $125 and his tax share is $100 perweek. Voter A receives zero marginal benefit from one concert aweek and would vote against it. Voter B receives $125 marginalbenefit from one concert per week but no marginal benefit from onesecurity guard. One concert per week also will fail to gain amajority when put to the vote. Assuming that both Voter A and VoterB will pay $100 per week in tax for each concert and each securityguard,
a.   they can bothgain by engaging in logrolling on the two issues.
b.  pairing the issues onone ballot will result in both Voter A and Voter B voting in favorof the combined issue.
c.   pairing theissues on one ballot will result in both Voter A and Voter B votingagainst the comÂbined issue.
d.  implicit logrollingwill result in Voter A voting in favor of the combined issue, butin Voter B voting against it.
5.  Ifbureaucrats seek to maximize the size of their budgets, theywill:
a.   seek to fundlevels of services up to the point at which MSC = MSB.
b.  seek to fund levels ofservices for which TSB > TSC.
c.   seek to fundlevels of services for which MSC > MSB.
d.  both (b) and (c)
6.  Thedemand curve for a pure public good is:
a.   obtained byadding the quantity demanded at each possible price for allconsumers.
b.  obtained by summing themarginal benefits of each consumer for each possible quantity.
c.   always upwardsloping.
d.  always a flat line.
7.  Avoter’s most-preferred political outcome will be that for whichthe:
a.   marginal benefitof a pure public good is equal to the voter’s tax share perunit.
b.  total benefit per unitof a pure public good is equal to the voter’s tax share perunit.
c.   differencebetween the marginal benefit of a pure public good and the voter’stax share per unit is maximized.
d.  marginal benefit of apure public good is equal to zero, no matter what the voter’s taxshare per unit.
13. If the quantityof good A is on the vertical axis and the quantity of good B is onthe horizontal axis, the slope of the corresponding isocost lineis:
a.   the price of goodB divided by the price of good A.
b.  the negative of theprice of good B divided by the price of good A.
c.   the price of goodA divided by the price of good B.
d.  the negative of theprice of good A divided by the price of good B.
14.  Ifthe quantity of good A is on the vertical axis and the quantity ofgood B is on the horizontal axis, the marginal rate of technicalsubstitution of the corresponding isoquant line is:
a.   the marginalproduct of good B divided by the marginal product of good A.
b.  the negative of themarginal product of good B divided by the marginal product of goodA.
c.   the marginalproduct of good A divided by the marginal product of good B.
d.  the negative of themarginal product of good A divided by the marginal product of goodB.
15.  Ifthe quantity of good A is on the vertical axis and the quantity ofgood B is on the horizontal axis, then the cost-effective mixbetween the two goods occurs when:
a.   the slope of theassociated isoquant line equals the price of A divided by the priceof B.
b.  the marginal rate oftechnical substitution equals the price of A divided by the priceof B.
c.   the marginal rateof technical substitution equals the price of B divided by theprice of A.
d.  either (a) or (c).
