Which of the following is an assumption of the median voter model? a. Voters are assumed to have heterogeneous preferences. b. Voters are assumed to be able to place all possible election outcomes within a one-dimensional continuum. c. Voters are assumed to have homogenous preferences. d. Voters are assumed to be able to compare current […]
Provide arguments for and against education vouchers. What will be an ideal response? ANSWER Education vouchers are attractive policy options because they introduce competition into the public education system. The hope is that just like in other areas of life, choice and competition will increase the quality of goods provided and lower the cost. […]
List two economic reasons why representative democracy makes sense What will be an ideal response? ANSWER Representative democracy makes economic sense for two reasons. First, having fewer individuals involved in the decision-making process will lower the costs of making decisions. Second, there are benefits from specialization and having some individuals specialize in politics (or […]
Producers may respond to a unit tax by _____. a. increasing the value of each unit b. increasing the number of units sold c. differentiating their product line d. selling the product in bundles ANSWER a
Provide a description of the TIT FOR TAT strategy. Give a brief explanation of the importance of TIT FOR TAT strategy in Robert Axelrod’s computer tournaments and the implications of his results for public policy. What will be an ideal response? ANSWER The TIT FOR TAT Strategy is to cooperate as long as the […]
The most important difference between unit excise taxes and ad valorem excise taxes is _____. a. the unit tax will change in response to a change in the price of the taxed good, while the ad valorem tax will not b. the unit tax will not change in response to a change in the price […]
Does education increase economic growth? Explain your answer. What will be an ideal response? ANSWER Yes. While the relationship is not easily quantified, but there does seem to be a positive relationship between education and economic growth. At the same time, however, higher incomes (from economic growth) cause individuals to consume more education, so […]
A disadvantage of unit excise taxes is they create the incentive _____. a. for producers to favor smaller products over larger products b. for producers to favor expensive products over inexpensive products c. for buyers to purchase more of the good then they otherwise would d. for buyers to shift to substitute goods with ad […]
The median voter model examines the outcome of majority rule decisions and _____. a. concludes that the outcome will be the one preferred by the median voter b. assumes that the outcome will be determined by the median voter c. uses the median voter to analyze the decision-making of bureaucrats d. found that the median […]
Describe the argument that education generates a positive externality. Why might this externality not be relevant in terms of economic efficiency? What will be an ideal response? ANSWER Education is often said to produce a positive externality because there are positive spillovers from getting an education for which the consumer of education is not […]
