Exam 21: Political Economy and Public Choice

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.

According to public choice theory,the main reason for some politicians' ability to build support for policies that generate more costs than benefits is that

Control of the media has exactly the effects that we would expect from our study of _____ in democracies.

A simple logic underlying the apparent chaos of seemingly unique and momentous elections is that:

How are democracy and wealth related?

The two largest sources of government spending are:

Sugar producers likely won't do much to oppose a law that reduces the supply of sugar and raises prices.

Which of the following statements is FALSE?

Explain why there may be a bi-causal (causation in both directions)relationship between democracy and wealth.

Politicians can often use the concept of rational ignorance on the part of voters to their advantage.

The political power of farmers has increased as the share of farmers in the population has decreased.

Why is public food distribution better in election and preelection years?

There are three voters and two representatives in a democracy.Voter 1 supports government spending of $51.Voter 2 supports government spending of $52.Voter 3 supports government spending of $56.According to the median voter theorem,politicians will converge upon a spending bill of:

What does the evidence from 60 years of United States data show regarding the growth rate in personal income in each quarter of a President's term in office?

Ignorance about political matters is important for the economy for each of the following reasons,except:

In the case of the sugar quota,those harmed are rationally ______ and those benefitted are rationally ______.

Figure: Median Voter 1 Suppose the figure above represents the preferences of five voters and two candidates regarding defense spending.According to the figure above,who is the median voter and which candidate will win the election?

The political business cycle is:

Use the following to answer questions Figure: Smoking Ban Policy Spectrum -(Figure: Smoking Ban Policy Spectrum)Refer to the figure.If there are only two candidates,A and B,and a smoking ban is the only issue being debated in this election,based on the median voter theorem,which candidate will win the election?

Rational ignorance in politics is the idea that obtaining information about candidates has little benefit because one's own vote has almost no chance of changing the outcome of an election.