Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter 6, Problem 14CQ
To determine
Identify the action that is an example of corruption.
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"No voting system is perfect." What does it mean by economist K. Arrow? Give a brief account on Condorcet Voting Paradox. A public school district is voting on the school budget and the resulting student-teacher ratio. A poll finds that 20 percent of the voters want a ratio of 9:1, 25 percent want a ratio of 10:1, 15 percent want a ratio of 11:1, and 40 percent want a ratio of 12:1. What outcome would you expect the district to
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Economics: Private and Public Choice
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- How might special interest groups and lobbyists influence campaigns and elections? Group of answer choices political party and influence legislation. They go door to door educating voters on campaign and election issues. While they do not participate in elections, they exercise a lot of influence through their relationships with elected officials. When politicians are elected to office, members of special interest and lobbyists take jobs working for that politician and in this way influence their work, campaigns, and elections.arrow_forwardIn 1989, Senator Bob Packwood asked Congress’s Joint Committee on Taxation how much extra revenue the government would raise if it just started taxing 100% of all income over $200,000 per year. The Joint Committee crunched some numbers and reported an answer: $204 billion per year. a. What is wrong with this answer? In 1989, very few people made over $200,000 a year, so the estimate of the tax revenue is far too high. Increasing government spending by $204 billion each year would have generated economic growth, and subsequently even higher amounts of tax revenues. The Joint Committee on Taxation did not have the tools needed to make such an estimate accurately. No one would have an incentive to work once they had earned $200,000, so much of the taxable income would disappear.arrow_forwardAll of the following statements are true about median voter theory, except: Select the correct answer below: The median voter is in the middle of the political spectrum. The effects of the U.S. sugar lobby supports median voter theory. Median voter theory suggests that if a candidate needs more than 50% to win an election, the best way to win is to have median preferences. The median voter theory argues that politicians will try to match policies to what pleases the median voter preferences.arrow_forward
- how double taxation on a taxpayer may result if all countries were to tax the worldwide income of their residents and the income earned within their territorial boundaries? What methods do taxing authorities use to eliminate or mitigate the evil of double taxation.arrow_forwardLet's walk through the median voter theorem in a little more detail. Consider a town with three voters, Enrique, Nandini, and Torsten. The big issue in the upcoming election is how high the sales tax rate should be. As you'll learn in macroeconomics (and in real life), on average, a government that wants to do more spending has to bring in more taxes, so "higher permanent taxes" is the same as "higher government spending." Enrique wants low taxes and small government, Nandini is in the middle, and Torsten wants the biggest town government of the three. Each one is a stubborn person, and his or her favorite position-what economic theorists call the "ideal point-never changes in this problem. Their preferences can be summed up like this, with the x denoting each person's favorite tax rate: Enrique 0% N O Sales tax rate Nandini P Torsten 20% Suppose there are two politicians running for office, N and O (so ignore P for now). Enrique will vote for Choose your answer. Nandini will vote for…arrow_forwardSuppose there are five voters. Their preferences for the amount the federal government should spend to stimulate the economy are shown in the figure to the right. According to the median voter theorem, in a vote, how much will the federal government spend to stimulate the economy? The federal government will spend S billion. (Enter your response as an integer.) 1200 1100 1000- 900- 800- 700- 600 2500- 400- 300- 200- 100- Greg kelly Christina Luisarrow_forward
- The federal government currently uses many forms of taxation, both direct and indirect, to raise revenue. Would it not be more effective and less burdensome just to employ a single tax? What would you consider to be a more effective and efficient system of raising revenue?arrow_forwardIn a response to public outcry over the Internal Revenue Service's (IRS) extent and abuse of power, the Federal government has decided to disband the IRS in favor of creating a new administrative agency to oversee taxation. As a business owner, what steps might you be able to take to ensure there are control's and limits to the agency's power? How does this compare with the controls available to branches of the government?arrow_forwardWhat would happen if Texas collects less taxes and generates less revenue?arrow_forward
- 4arrow_forwardConsider the race for governor of a small state. The population of the state is evenly divided between three cities-Riverville, Hanover, and Danbury. The governor's race is between Ron Ruskin (the mayor of Riverville) and Ted Topple (the mayor of Hanover). Assume that no matter what is said during the campaign, Ruskin can count on the support of 100% of the Riverville population, and Topple can count on the support of 100% of the Hanover population. Assume 100% voter participation. According to the result of majority-rule voting, the next governor will be the one preferred by the majority of the residents of The two candidates are asked in a debate about their support of recreational subsidies. Public opinion polls in the city you just identified have shown the following about the level of recreational subsidies desired: • 70% want a low level 20% want a medium level • 10% want a high level Assuming that voters prefer outcomes closer to their preferred choices to outcomes further away,…arrow_forwardEvaluate the Citizens United decision. Why did the Supreme Court consider campaign contributions a form of speech?arrow_forward
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