1. Exclusionary zoning would create $300 million in benefits and $500 million in costs. 6000 people would receive the benefits, and 4 million people would pay the costs. If voters are rationally ignorant, then...

Exclusionary zoning would create $300 million in benefits and $500 million in costs. 6000 people would receive the benefits, and 4 million people would pay the costs. If voters are rationally ignorant, then...

people who receive the benefits have a strong incentive to be informed about the policy.

people who pay the costs have a strong incentive to be informed about the policy.

All of the above are correct.

None of the above are correct.

2."The Impact of Chinese Trade on U.S. Employment: The Good, The Bad, and The Apocryphal" estimated the effects of increased trade between the US and China. What did the study find?

"The Impact of Chinese Trade on U.S. Employment: The Good, The Bad, and The Apocryphal" estimated the effects of increased trade between the US and China. What did the study find?

Labor markets that lost the most manufacturing jobs were different from the labor markets that gained the most services jobs.

Trade with China increased US manufacturing jobs.

Trade with China decreased US services jobs.

All of the above are correct.

3.Which of the following is an example of pessimistic bias?

Which of the following is an example of pessimistic bias?

A person does not have self-confidence when asked to evaluate her own abilities.

A person believes that politicians will break their campaign promises whenever it's convenient.

A person believes that the typical American is poorer today than one hundred years ago.

A person is reluctant to give a speech when she has to speak after a dynamic, interesting speaker.

4.In March, the demand and supply of towels are price inelastic. In September, the demand and supply of towels are price elastic. If the government imposes the same tax in both periods, which of the following is correct?

In March, the demand and supply of towels are price inelastic. In September, the demand and supply of towels are price elastic. If the government imposes the same tax in both periods, which of the following is correct?

The tax raises the same revenue in September and March.

The tax raises more revenue in March than September.

The tax raises more revenue in September than March.

5.Why doesn't education reduce rational ignorance about politics?

Why doesn't education reduce rational ignorance about politics?

People are becoming more educated, but average IQ levels are dropping, so the net effect is no change in political knowledge.

Current curriculum does not emphasize government, history, and current events.

Education increases the opportunity to gather political knowledge, but people do not seize these opportunities when the benefit of political knowledge is low.

The education system is incapable of competently teaching the basic knowledge needed to be an informed voter.

6.Eric believes that 30% of the US population are immigrants. He is not confident in his belief and is willing to change his mind. Which of the following is correct?

Eric believes that 30% of the US population are immigrants. He is not confident in his belief and is willing to change his mind. Which of the following is correct?

This behavior is consistent with neither rational ignorance nor rational irrationality.

This behavior is consistent with rational ignorance.

This behavior is consistent with both rational ignorance and rational irrationality.

This behavior is consistent with rational irrationality.

7.Popcorn has price-elastic demand and price-inelastic supply. The government wants to tax popcorn with buyers feeling all of the economic burden. How can the government accomplish this?

Popcorn has price-elastic demand and price-inelastic supply. The government wants to tax popcorn with buyers feeling all of the economic burden. How can the government accomplish this?

The government puts half of the tax on buyers and half on sellers.

The government puts the entire tax on sellers.

The government puts the entire tax on buyers.

None of the above are correct.

8.Why is the word "rational" in rational irrationality?

Why is the word "rational" in rational irrationality?

The theory assumes irrationality is caused by a neurological disorder that can be controlled with medication.

The theory assumes a person is rational in the public sector and irrational in the private sector.

The theory assumes a person chooses her level of irrationality by comparing costs and benefits.

The theory assumes a person is rational when she's alone and irrational when she's in public.

9.A country has free trade and imports luggage. If the government places a tariff on imported luggage, what happens?

A country has free trade and imports luggage. If the government places a tariff on imported luggage, what happens?

Government revenue decreases.

Consumer surplus increases.

Producer surplus decreases.

Total surplus decreases.

All of the above are correct.

10.The social benefit of a tree is $15. The external benefit is $6. What is the optimal Pigouvian subsidy for a tree?

The social benefit of a tree is $15. The external benefit is $6. What is the optimal Pigouvian subsidy for a tree?

$21

$9

$6

$15