Sjsu Public Finance Midterm 2

Front 1

When two people are on the contract curve, the allocation of goods

Back 1

is pareto efficient

Front 2

A government policy of providing free public K-12 education is most consistent with

Back 2

The First Thereom of Welfare Economics

Front 3

In a competitive market, prices adjust until all consumers find themselves

Back 3

on the contact curve

Front 4

If everyone's utility is given equal weight and a change in resource allocation results in one person's gain exceeding another person's loss, we can say that the new allocation

Back 4

increases welfare

Front 5

A dictator is most likely to

Back 5

maximize her own utility

Front 6

The fact that at the competitive equilibrium nobody can be made better off without making someone else worse off implies that

Back 6

the prices need to adjust further

Front 7

Gains from trade will be possible as long as

Back 7

marginal rates of substitution are equal across individuals.

Front 8

Joe and Rita each have some cookies and milk. Joe is willing to trade 2 cookies for an additional ounce of milk. Rita is willing to trade 4 cookies for an additional ounce of milk. If trading is possible, which of the following is most likely to occur?

Back 8

Joe will exchange milk with Rita for cookie

Front 9

The First Theorem of Welfare Economics can be expressed as

Back 9

the competitive equilibrium is efficient

Front 10

A situation is Pareto efficient if

Back 10

there is no way to make someone better off without making someone else worse off.

Front 11

If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then

Back 11

two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios

Front 12

If a society only cares about efficiency and not equity, then

Back 12

all points on the contract curve yield the same level of social welfare.

Front 13

If society were to maximize the utility of its best-off member, the final allocation would be

Back 13

one in which one person gets everything.

Front 14

A tiny fishing village has 3 residents. Ann has a utility of 10, Bruce has a utility of 6, and Charlie has a utility of 7. If the mayor uses a Rawlsian social welfare function, the social welfare of this tiny village would be

Back 14

6

Front 15

No clearly defined socially preferred outcome may result when majority voting on outcomes because

Back 15

voting may lead to non-transitive preference.

Front 16

The Arrow impossibility theorem suggests

Back 16

there is no universally applicable decision rule in a majority-rule democracy.

Front 17

If society were to maximize the utility of its worst-off member, the final allocation would most likely be

Back 17

relatively egalitarian.

Front 18

A cake is to be shared by two people. Both desire the largest piece possible. One of the two will cut the cake. Under which of the following situations will the cutter adopt a Rawlsian social welfare function?

Back 18

The person not cutting the cake chooses the first piece.

Front 19

The fact that any Pareto-efficient equilibrium can be achieved through competition by adjusting endowments is called

Back 19

the Second Welfare Theorem.

Front 20

The fact that at the competitive equilibrium nobody can be made better off without making someone else worse off implies that

Back 20

the equilibrium is Pareto-efficient.

Front 21

Which of the following is NOT needed for the Median Voter Theorem to hold.

Back 21

voters have systematic preferences

Front 22

What is a voter's preferred-to-set for a status quo policy?

Back 22

The set of all alternatives they strictly prefer to the status quo.

Front 23

Assuming that voters have single-peaked preferences violates Arrow’s condition of:

Back 23

universal admissibility

Front 24

The agenda setter in a group...

Back 24

can often dictate the outcome.

Front 25

What is the Majority Rule Win Set of a status quo policy?

Back 25

The set of all alternatives that would beat the status quo in pairwise majority rule.

Front 26

Any policy change that results in a Pareto-superior allocation

Back 26

must increases welfare

Front 27

Hume's marsh draining game shows us that:

Back 27

When it is individually beneficial to contribute to a collective good there is no incentive to free ride.

Front 28

If Hume's marsh draining game is going to be played only once how could the players ensure cooperation.

Back 28

By credibly increasing Ui(x) or decreasing Ci(x) for both players.

Front 29

Hume's "marsh draining" game is the most like which of the classic games we studied?

Back 29

Prisoner's Dilemma

Front 30

Which two social virtues have been the subject of study with regard to their impact on the Prisoner’s Dilemma

Back 30

Altruism and Trust

Front 31

In which type of repeated marsh draining game are we most likely to see cooperation emerge.

Back 31

infinitely repeated game.

Front 32

Each of the following have the potential to diminish the effectiveness of a third party enforcer; with the exception of:

Back 32

Fear of enforcement

Front 33

Hume's marsh draining game shows us that:

Back 33

In the absence of third party enforcement of an agreement to cooperate, cooperation is difficult.

Front 34

What is "unraveling" in terms of a repeated normal form game?

Back 34

That in a finitely repeated game players play the "single shot" dominant strategy every round.

Front 35

In Hume's marsh draining game:

Back 35

There is one pure strategy Nash equilibrium and it is Pareto inferior.

Front 36

An example of using "private rewards" to solve collective action problems is:

Back 36

liability insurance for everyone who pays their dues in a labor union.

Front 37

Which of the following would be an example of a selective incentive under the by-product theory:

Back 37

Receiving coffee mugs when donating to National Public Radio fund raising campaigns

Front 38

The "collective action problem" is that:

Back 38

Even if everyone in a group wants the collective good, there is an incentive to free ride.

Front 39

In a step-good game, n is the number of people in a group and k is the number of people who must contribute to providing a collective good in order for it to be provided. For example, if in a group of n=100 you need at least 50 people to contribute before a collective good can be provided, then k=50.Under what condition is contributing any given player i's best response to contribute?

Back 39

When the number of other players contributing is k-1.

Front 40

As opposed to large groups, small groups have one of the following attributes which may contribute to collective action:

Back 40

Tendency to engage in repeat play; employing tit for tat strategies

Front 41

The collective action problem can be formalized as a:

Back 41

step-good game

Front 42

Using the Riker-Ordeshook voting versus abstention calculous (independent of any experiential factors); which of the following would hold true:

Back 42

A sensible U.S. voter would not vote in Presidential elections

Front 43

Who wrote the Logic of Collective Action?

Back 43

Mancur Olson

Front 44

What is pivotalness in a "step-good" game?

Back 44

When a player's decision is decisive in determining if the collective good is provided or not.

Front 45

In a step-good game, n is the number of people in a group and k is the number of people who must contribute to providing a collective good in order for it to be provided. For example, if in a group of n=100 you need at least 50 people to contribute before a collective good can be provided, then k=50.What is true about the size of k?

Back 45

When k is very close to n the collective good will likely be provided.

Front 46

Richard Wagner describes a “political entrepreneur” as:

Back 46

Someone who sees a cooperation dividend that is currently not being enjoyed