Prof. Bryan Caplan

bcaplan@gmu.edu

http://www.bcaplan.com

Econ 410

1.  What probability would you assign to each of the following?

a.  You get an A in this class.

b.  You become best friends with someone you meet in this class.

c.  You live to be 90 years old.

d.  You oversleep on the day of the midterm.

2.  Diagram each of the following for an individual, and note his or her equilibrium level of political knowledge:

a.  The MC of acquiring political knowledge is always positive and the benefits are always 0.

b. The MC of acquiring political knowledge is negative at first, and the benefits are always 0.

c.  The MC of acquiring political knowledge is always positive, but the benefits are positive at first.

3.  Name what are, for you, the five most memorable actions Clinton took.  How many of these were, in your judgment, important policy decisions?  Why the contrast? (1-2 sentences)

4.  Diagram the public goods nature of political information.  Be careful to draw the S curve, the D curve, and the SB curve in a sensible way.

5.  If the entire U.S. population were given a test of general political knowledge, what percentile do you think you would get?  Why do you think you would do better or worse than average (50th percentile)? (1-2 sentences)

6.  Give an original real-world application of the theory of optimal punishment. (3-4 sentences)

7.  Throw 2 6-sided dice and add them.  Then throw 8 6-sided dice and add them.  How far off from average were your two rolls in percentage terms?  How does this illustrate the Principle of Aggregation?  (Example: If an average roll were 8, and you got a 6, you were (8-6)/8=25% off from average in percentage terms).

8.  Name one political issue where you think random errors largely "cancel each other out."  If a referendum were held on this issue, how would the vote shares and outcome differ from a world with perfect information? (2-3 sentences)

9.  Suppose that 80% of voters are tenants, and 20% are landlords.  Rent control makes each landlord \$1000 poorer and each tenant \$100 richer.  Carefully explain why the median voter result (with selfish voting) will be inefficient.  (2-3 sentences)

10.  In the preceeding example, what would the efficiency effect of a 90% super-majority rule be, if there is initially no rent control?  (2-3 sentences)

11.  How could log-rolling be efficiency-enhancing?  How could it be inefficiency-enhancing?  Give two contrasting examples and explain the difference. (3-4 sentences)

12.  According to the SIVH, who seems likely to favor and oppose the following programs?

a.  Welfare

b.  Foreign aid

c.  Environmental protection

d.  NAFTA

13.  Name one issue where, from your own personal experience, the SIVH works reasonably well, and another where it works poorly.  Can you think of any fundamental way that these issues differ? (3-4 sentences)

14.  What account best describes your political beliefs?  The SIVH?  Sociotropic voting?  Ideological voting?  Group-interest?  Give some specific examples. (1 paragraph)

15.  Can you place yourself on a simple liberal-conservative spectrum?  If so, where?  If not, what key elements of your beliefs does this spectrum fail to capture? (1 paragraph)

16.  Carefully explain why Jane Fonda can be rich, Democratic, and highly selfish at the same time.  What is the expected cost for her if she votes Democratic rather than Republican?  (2-3 sentences)