Question 1

The Pareto Unanimity axiom in Arrow's theorem implies that Arrow believes social choice processes should choose only pareto efficient outcomes.

Accepted Answer

A) True 
 B)False  False

Question 2

A democratic (majority rule) decision over a multi-dimensional issue can be manipulated by an agenda setter only if voter tastes are not single-peaked.

Accepted Answer

A) True 
 B)False  False

Question 3

Consider voter preferences over a public good y that is being funded by a proportional income tax.
a.Illustrate how this might lead to single peaked voter preferences.
b.Suppose there exists a privately available good x that is substitute for y.How does this introduce non-single peakedness?
c.Now suppose x is relatively complementary to y.What would you expect to happen to voter preferences as this complementarity gets stronger?

Accepted Answer

a. This is discussed in Graph 28.1 of the text.
b. This is discussed in Graph 28.3 of the text.
c. The more complementary x is to y, the less likely it is that preferences will be non-single peaked.

Question 4

Suppose there are 3 voters in a legislature, and two projects are up for consideration.Project A creates benefits of 3 for district 1 but benefit of -1 in district 2 and -3 in district 3.Project B creates benefits of 3 in district 2, -1 in district 1 and -3 in district 3.
a.Would either of these projects be implemented under simple majority rule voting (where each project is approved or not approved on its own)?
b.How would your answer to (a) change if the projects can be bundled?
c.Is it efficient to fund these projects?
d.Suppose the Coase Theorem applies to legislatures -- i.e.suppose legislators can create alternatives with cash side-payments.What might voter 3 do to prevent the outcome in (b)?
e.True or False: If transactions costs are low and side-payments are allowed, only efficient projects will pass under vote trading.

Accepted Answer

a. No -- each would only get one vote.
b

Question 5

Voting in large elections is irrational unless people get something like a "warm glow" from having voted.

Accepted Answer

A) True 
 B)False

Question 6

The "Anything-Can-Happen" theorem doesn't really imply "anything can happen" in a democratic process with multiple issues; rather, it implies that political outcomes can be manipulated, and some political institutions are better at constraining the degree to which this can be done than others.Do you agree or disagree with this statement? Why?

Accepted Answer

Taken literally, the theorem does say th

Question 7

Median voters in settings where the policy space is single dimensional and everyone has single peaked preferences are Arrow Dictators.

Accepted Answer

A) True 
 B)False

Question 8

Vote trading in legislatures can lead to efficient outcomes that might otherwise not have been reached.

Accepted Answer

A) True 
 B)False

Question 9

In settings where the policy space is single dimensional, non-single peaked preferences by some implies there is no Condorcet winner.

Accepted Answer

A) True 
 B)False

Question 10

Arrow suggests that any social choice process should be applicable to any set of preferences for individuals -- because we can't be sure individual preferences are always rational.

Accepted Answer

A) True 
 B)False

Question 11

In 2000, three candidates appeared on virtually all ballots in the US Presidential election: George W.Bush, Al Gore and Ralph Nadar.Bush arguably won the election by 537 votes in Florida where Ralph Nadar received nearly 100,000 votes.It is often argued that Al Gore would have won the election had Ralph Nadar not been on the ballot in Florida.Discuss how this suggests that the social choice process the US uses to elect Presidents does not satisfy the Independence of Irrelevant Alternatives (IIA) assumption in Arrow's theorem.

Accepted Answer

The IIA assumption says that a social ch

Question 12

Suppose voter preferences over a public good funded through a proportional income tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

Accepted Answer

A) True 
 B)False

Question 13

If oil executives control the governmental agency which regulates oil companies, regulatory capture has occurred.

Accepted Answer

A) True 
 B)False

Question 14

Suppose voter preferences over a public good funded through a head tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

Accepted Answer

A) True 
 B)False

Question 15

Discuss how a politicians "policy differentiation" from his opponent in an election softens the competition over how much in political rents the politician will be able to collect.

Accepted Answer

Politicians in electoral competition are

Question 16

In an election in which there is no policy which can defeat all other policies, the sequence of the votes determine​s the outcome, even under majority rule.

Accepted Answer

A) True 
 B)False

Question 17

A presidential candidate once famously said about a particular policy: "I voted for it before I voted against it." How might such a statement make sense in the context of sophisticated voting along agendas.

Accepted Answer

If a sophisticated voter looks down the

Question 18

If a coalition D is decisive over a pair of social outcomes (x,y) under a social choice process that satisfies Arrow's axioms, then another coalition C (that differs from D) cannot be decisive over a different pair (a,b) of social outcomes.

Accepted Answer

A) True 
 B)False

Question 19

It is possible to come up with a democratic social choice process that satisfies Arrow's axioms as long as we are willing to let go of the No Dictatorship axiom.

Accepted Answer

A) True 
 B)False

Exam 28: Governments and Politics

The Pareto Unanimity axiom in Arrow's theorem implies that Arrow believes social choice processes should choose only pareto efficient outcomes.

A democratic (majority rule) decision over a multi-dimensional issue can be manipulated by an agenda setter only if voter tastes are not single-peaked.

Voting in large elections is irrational unless people get something like a "warm glow" from having voted.

Median voters in settings where the policy space is single dimensional and everyone has single peaked preferences are Arrow Dictators.

Vote trading in legislatures can lead to efficient outcomes that might otherwise not have been reached.

In settings where the policy space is single dimensional, non-single peaked preferences by some implies there is no Condorcet winner.

Arrow suggests that any social choice process should be applicable to any set of preferences for individuals -- because we can't be sure individual preferences are always rational.

Suppose voter preferences over a public good funded through a proportional income tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

If oil executives control the governmental agency which regulates oil companies, regulatory capture has occurred.

Suppose voter preferences over a public good funded through a head tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

Discuss how a politicians "policy differentiation" from his opponent in an election softens the competition over how much in political rents the politician will be able to collect.

In an election in which there is no policy which can defeat all other policies, the sequence of the votes determine​s the outcome, even under majority rule.

A presidential candidate once famously said about a particular policy: "I voted for it before I voted against it." How might such a statement make sense in the context of sophisticated voting along agendas.

If a coalition D is decisive over a pair of social outcomes (x,y) under a social choice process that satisfies Arrow's axioms, then another coalition C (that differs from D) cannot be decisive over a different pair (a,b) of social outcomes.

It is possible to come up with a democratic social choice process that satisfies Arrow's axioms as long as we are willing to let go of the No Dictatorship axiom.

Introduction

A Consumers Economic Circumstances

Economic Circumstances in Labor and Financial Markets

Tastes and Indifference Curves

Different Types of Tastes

Doing the Best We Can

Income and Substitution Effects in Consumer Goods Markets

Wealth and Substitution Effects in Labor and Capital Markets

Demand for Goods and Supply of Labor and Capital

Consumer Surplus and Deadweight Loss

One Input and One Output: a Short-Run Producer Model

Production With Multiple Inputs

Production Decisions in the Short and Long Run

Competitive Market Equilibrium

The Invisible Hand and the First Welfare Theorem

General Equilibrium

Choice and Markets in the Presence of Risk

Elasticities, Price-Distorting Policies, and Non-Price Rationing

Distortionary Taxes and Subsidies

Prices and Distortions Across Markets

Externalities in Competitive Markets

Asymmetric Information in Competitive Markets

Monopoly

Strategic Thinking and Game Theory

Oligopoly

Product Differentiation and Innovation in Markets

Public Goods

What Is Good Challenges From Psychology and Philosophy

Filters

In an election in which there is no policy which can defeat all other policies, the sequence of the votes determines the outcome, even under majority rule.