Prof.
Bryan Caplan

bcaplan@gmu.edu

http://www.bcaplan.com

Econ
849

**HW
#2 ***(please type; answer any TWO essay questions and ALL
of the other questions)*

1. (1 page, double-spaced) Why was there platform divergence in
the last

2. (1 page, double-spaced) Who will ultimately bear the incidence
of the

3. (1 page, double-spaced) How would restricting the franchise to
college graduates affect

4. Using the two-equation S&D system from
the notes, prove/show that Q falls by [bd/b+d]t
whether buyers or sellers legally pay the tax.

5. Using the
two-equation S&D system from the notes, prove/show that a profit-maximizing
monopolist in a market without taxes produces **a larger quantity **than a
competitive market under a tax-revenue-maximizing government. *To simplify the problem, assume that a=0.*

__Hint:__ The monopoly maximizes PQ(P)-TC,
with TC=Q^{2}/2b. The government
just maximizes tQ(t).

6. Give examples of:

a. Single-peaked preferences

b. Non-single-peaked transitive
preferences

c. Intransitive preferences

7. Imagine a simple median voter situation with
the following twist: party A is more popular than party B, such that every
voter is indifferent between their shared ideal point p* provided by party B
and a deviation of e from their ideal point
provided by party A. Specifically:

U(A)=U(B)
iff _{}

Assume
further that if voters are indifferent, they vote for party A.

Then
intuitively answer the following questions: (no math needed)

a. If both parties maximize their
votes, what platforms do they offer and who wins?

b. If party A has policy
preferences (it wants to make p as large as possible conditional on winning),
what platforms are offered and who wins?

c. How would uncertainty about the
position of the median voter affect the results?