Name:_______________________
Economics 854 Final
Prof. Bryan Caplan
Spring, 2011
Instructions:
· You have 120 minutes to complete this exam.
· Write all answers directly on the exam.
· You may use any books, notes, or other materials that you wish, but avoid spending too much time on any one question.
· Partial credit may be awarded on all questions.
· The maximum possible number of points is 120.
· You should have five pages, counting this one.
Part 1: True,
False, and Explain
(10 points each - 2
for the right answer, and 8 for the explanation)
State whether each of the following six propositions is true
or false. In 2-3 sentences (and
clearly-labeled diagrams,
when helpful), explain why.
1. T, F, and
Explain: The empirical evidence against the SIVH undermines the central
conclusion of Wittman’s The Myth of
Democratic Failure.
2. According to
Mises’ Democracy-Dictatorship Equivalence Theorem, dictatorships adopt the
policies favored by their median citizen.
T, F, and Explain:
This does not imply that on average, democracies and
dictatorships will have identical policies.
3.
True,
False, and Explain: Education,
job security, and income level all make people “think like economists,” but
conservative ideology does not.
4. “To deal with this welfare bug problem, we could also allow such
proposals to be vetoed if another market clearly estimated bad consequences for
welfare as it will be defined in the future, say in one year. If someone then
spotted a bug, they could bet that elected representatives would agree that it
is a bug and fix it within one year. If speculators agreed, the proposal would
not be implemented.” (Robin Hanson, “Shall We Vote on Values But Bet On
Beliefs?”)
T, F, and Explain:
Hanson is essentially proposing futarchy constrained by a
supermajority veto.
Part 2: Short
Essays
(20 points each)
In 6-8 sentences, answer all of the following questions.
1. Bartels’ “The
Opinion-Policy Disconnect” points out important inconsistencies in public
opinion. Use both expressive voting
theory, and rational irrationality to explain these inconsistencies. Which theory is more plausible? Why?
2. Apply Mosca’s
insights in chapter 7 of The Ruling Class
to any political movement you know a lot about.
Give details. From Mosca’s
perspective, what would be the most
surprising fact about the political movement you’re discussing?
3. Suppose you’re an
advisor to Gorbachev in 1985. You want
to help him maximize the Soviet Empire’s economic growth subject to the
constraint that he remain dictator for the rest of his natural life with
90% probability. Taking full advantage
of your knowledge of public choice and dictatorship, write a short
Machiavellian political-economic strategy memo to Gorbachev.
4. Caplan argues that
from a global point of view, national defense cannot be a public good.
Explain his argument. Does this
have any interesting policy implications?
Why or why not?