Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 22.2, Problem 2QQ
To determine
Applying median voter theorem.
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The average cost of landscaping services for members of a condominium community is $350 per week. Assume that the quantity of landscaping services is perfectly correlated with the number of gardeners per week. Suppose the community consists of seven residents, each with the identical marginal benefit curve for landscaping services. The marginal benefit of the first gardener is $100 per resident.
a) Assume that the efficient number of gardeners is three per week. What is the political equilibrium under majority rule if each voter is assigned a tax share of $50 per gardener per week? Does the political equilibrium under majority rule differ from the Lindahl equilibrium?
What is meant by limited and bundled choice when voting on a bill or candidate?
Economists James Buchanan and Gordon Tullock are well-known for developing
Group of answer choices
the impossibility theorem.
the voting paradox.
the public choice model.
the concept of government failure.
Chapter 22 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Outline the median voter theorem and explain its importance to the successful application of a majority voting system.arrow_forwardThe Principles of Taxation Taxation systems are centered around two basic ideas. One is that people that benefit from services provided by tax revenues should be the ones who pay for them. Secondly, taxes should be paid in proportion to the number of benefits or services that an individual receives. Three Types of Taxes Taxes can be proportional, progressive, or regressive in nature. A proportional tax is equal in that it sets the same percentage of income taxation on everyone regardless of income. So for individuals, as their income rises or falls, they pay the same percentage in tax. A progressive tax imposes a higher percentage rate of taxation as incomes go up. So as people make more money they pay a higher percentage of that income in tax, and the percentage goes down if their income goes down. Regressive taxes are the opposite of progressive. They impose a higher percentage of taxes on lower incomes than on higher incomes. Often these taxes are not income taxes, but other types…arrow_forwardhow does the election result change if a tax on non-voters doubles the number of voters while preserving the distribution of preferences?arrow_forward
- Outline the median voter theorem and explain its importance to the successfulapplication of a majority voting system.arrow_forwardWhy do legislators vote for spending projects in districts that are not their own?arrow_forward4.10. A social choice function satisfies the weak Pareto criterion if,whenever every voter places one candidate above another, say rankingcandidate A over candidate B, then candidate B cannot be the uniquewinner. (This differs from the Pareto property owing to the words “theunique”.)(a) Explain why any method that satisfies Pareto also satisfies weakPareto.(b) Explain why the antiplurality method satisfies weak Pareto.(c) Explain why the agenda method violates weak Pareto.arrow_forward
- Distinguish between a carbon-tax and a cap-andtrade strategy for reducing carbon dioxide and other so-called greenhouse gases (that are believed by many scientists to be causing global warming). Which of the two strategies do you think would have the most political support in an election in your home state? Explain your thinking.arrow_forwardSuppose there are three individuals living in a community. Their demands for a public good are described below and they have decided to vote on the level of public good to be provided. The $36 MC is divided equally so each faces a tax price of $12. Would the level of the public good provided via a simple majority vote change if the community became more polarized than before? For example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead to higher, lower, or the same level of public good than before? Doug: MB = 60 - 3Q %3D Carl: MB = 40 - 2Q %3D Adam: MB = 20 - Q %3D O Higher O Lower O Samearrow_forwardSuppose there are three people in society who vote on whether the government should undertake specific projects. Let the net benefits of a particular project be $150, $140, and $50 for persons A, B, and C, respectively. a. If the project costs $300 and these costs are to be shared equally, would a majority vote to undertake the project? What would be the net benefits to each person under such a scheme? Would total net benefits be positive? b. Suppose the project cost $375 and again costs were to be shared equally. Now would a majority vote for the project and total net benefits be positive? c. Suppose (presumably contrary to fact) votes can be bought and sold in a free market. Describe what kinds of results you might expect in part a and part b.arrow_forward
- Financial Aid is an example of allocation by majority rule personal characteristics forcearrow_forwardWhich of the following is true? a. Arrow’s Impossibility Theorem states that There is no voting method that will satisfy a reasonable set of fairness criteria when there are three or candidates. b. Gibbard-Satterthwaite's theorem states that there is a voting method is completely resistant to strategic voting. c. None of the given choices d. May's Theorem states that the majority method will always have a winner.arrow_forwardIf the marginal cost of gardener is $500 no matter how many are employed. The marginal benefits per gardener varies for five residents according to the following table: Marginal Benefit for EachGardener Voter 1 4 A 575 550 525 500 B 275 200 125 C 125 100 75 125 100 75 E 100 75 Result A) If each voter is assigned to pay the same tax share of $100 per gardener, what is the political equilibrium under majority rule? B) Show that the Lindahl equilibrium will differ from the political equilibrium under majority rule?arrow_forward
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