Answered: Political Economy Assume there are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Political Economy Assume there are three voters: A, B and C. Voter preferences can be ranked along a left-to-right spectrum that ranges from 1-9; 1 being the most left leaning preference and 9 being the most right leaning preference. Suppose these voters will choose between candidates Smith and Jones in an upcoming election.

Voter Id	Preference(1-9)
A	4
B	5
C	6

True/False Explain: If the median voter theorem holds, candidates Smith and Jones will either both adopt preference 5 OR one will adopt preference 4 while the other adopts preference 6.

B) Suppose the electorate becomes more polarized; A moves from 4 to 1 while C moves from 6 to 9. B remains at 5. How does the median voter model predict candidates Smith and Jones will change their preference?

C) Keeping the assumptions from B, how does the election result change if a tax on non-voters doubles the number of voters while preserving the distribution of preferences?

D) If the tax in C induces 100% compliance (everyone votes), did this tax increase total surplus, decrease total surplus or have no effect on total surplus?

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