Exam 20: Political Economy and Public Choice

Economic conditions are a ______ predictor of United States presidential election outcomes.

Why do you think voters choose to be rationally ignorant even when it is time to elect a new president? I. Voters are not presented with enough information to make a rational decision. II. Voters often believe that their vote does not make any difference in the political process. III. The process of understanding the electorate system, the candidates' platforms, and critically assessing the candidates' policies takes up more of the voter's time than it is worth.

The theory of the median voter may not work if: I. voters do not vote. II. voters do not vote for the policy closest to their own positions. III. there are multiple dimensions over which the voting occurs.

Voter myopia refers to the fact that voters:

The median voter theorem tells us that, in a democracy, what counts are the number of voters and not their position, per se.

Use the following to answer questions: Figure: Kidney Trade Ban Policy Spectrum -(Figure: Kidney Trade Ban Policy Spectrum) Refer to figure. If A, B, and C are all candidates in the election, and an open market for kidney trading is the only issue being debated, based on the median voter theorem, which candidate will win the election?

How do special interests affect tax policy in the United States?

Studying politics doesn't pay because the outcome:

Most voters will tend to be concerned with:

Why do people tend to be rationally ignorant about presidential candidates?

Explain why political candidates-even those from different parties-seem to have very similar viewpoints on important political issues like Medicare, Social Security, and education spending.

Let's check on whether you are rationally ignorant. Which of the following four items is the biggest expenditure in the federal government's budget?

Suppose the government is considering a proposal for a new chicken subsidy. Growers of chickens stand to gain approximately $25 million in government funds over the next year if the proposal passes. The money, however, will come from increased taxes on consumers of chicken (a new "chicken tax"). If there are approximately 100 million consumers in the chicken market each year, how much would each be willing to spend, on average, to contest the chicken tax?

When benefits are highly concentrated, but costs are diffused across a large number of people:

Which of the following is the largest part of the United States budget?

Although many people, from economists to environmentalists, oppose ethanol subsidies on grounds that it is inefficient and harms the environment, politician Mitt Romney once said, "I support the subsidy of ethanol. I believe it's an important part of our energy solution in this country." Why does Mr. Romney support ethanol subsidies? I. Most of the people harmed by the subsidies are rationally ignorant and thus don't oppose the policy. II. The benefits of the subsidy are concentrated among a group of producers who provide political and financial support to politicians who support the subsidies. III. Mr. Romney's support of ethanol subsidies is not only in his self-interest but also in the public's interest.

Larger groups tend to favor more inefficient policies.

How are rational ignorance, special interest groups, and economic inefficiency related?

There is a strong correlation between economic freedom and:

Of the following, which is the smallest part of the United States budget?