Note: I recommend that students who have never used BlackBoard attempt to log in before Thursday to be sure they know their password. Once you begin the assignment, you will not be able to navigate away from it. (If you do, you will not receive credit for the assignment.) The assignment involves reading an article in the External Links tab, and then submitting essay answers in the Assignments tab.
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Explain how voters can be considered consumers and how governments can be considered producers. What limits are there to this analogy?
Define rational ignorance. What are some reasons why we'd expect consumers to make better decisions than voters? Why is voting not rational? Why is voting rational? Here is
Explain how voting for a politician is like buying a bundled good. How does this help politicians deviate from their constituencies' interests? Look at the argument made here. Explain it in terms of point 3 from today's lecture.
George Bernard Shaw wrote that "A government that robs Peter to pay Paul can always depend on the support of Paul." Relate this statement to the special interest effect. How does this affect consumer surplus? How does this affect producer surplus?
"Since government-operated firms do not have to make a profit, they can usually produce at a lower cost and charge a lower price than privately owned enterprises." Evaluate this view.
Define: the special interest effect. Give examples. Why would producers seek political favors that have the effect of reducing producer surplus? Explain verbally and graphically.
Most of the benefits to agricultural support schemes such as the European Common Agricultural Policy go to
a. Consumers
b. The Government
c. Producers
d. Everyone gains equally from price supports
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Explain how voters can be considered consumers and how governments can be considered producers. What limits are there to this analogy?
Define rational ignorance. What are some reasons why we'd expect consumers to make better decisions than voters? Why is voting not rational? Why is voting rational? Here is
Explain how voting for a politician is like buying a bundled good. How does this help politicians deviate from their constituencies' interests? Look at the argument made here. Explain it in terms of point 3 from today's lecture.
George Bernard Shaw wrote that "A government that robs Peter to pay Paul can always depend on the support of Paul." Relate this statement to the special interest effect. How does this affect consumer surplus? How does this affect producer surplus?
"Since government-operated firms do not have to make a profit, they can usually produce at a lower cost and charge a lower price than privately owned enterprises." Evaluate this view.
Define: the special interest effect. Give examples. Why would producers seek political favors that have the effect of reducing producer surplus? Explain verbally and graphically.
Most of the benefits to agricultural support schemes such as the European Common Agricultural Policy go to
a. Consumers
b. The Government
c. Producers
d. Everyone gains equally from price supports
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