Name:_______________________

Economics 854 Final

Prof. Bryan Caplan

Spring, 2013

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. Suppose educational attainment is an important part of group identity. College grads identify with other college grads, high school grads identify with other high school grads, and so on.

T, F, and Explain: The group-interested voting model clearly predicts that the well-educated will support more government spending on education.

2. Wittman usually assumes the SIVH.

True, False, and Explain: Making Wittman’s assumption about voter motivation more realistic would undermine his conclusions about democratic efficiency.

3. The Enlightened Preference literature begins by measuring Political IQ.

T, F, and Explain: If the Enlightened Preference approach is valid, exogenously increasing PIQ will raise property values.

4. “Public choice can argue, coherently, that the voter derives expressive benefits solely from the act of voting, and not at all from voting one way rather than another.” (Brennan and Lomasky, Democracy and Decision)

T, F, and Explain: Brennan and Lomasky’s view here implies that the median person who actually votes will be more expressive than the median person eligible to vote.

Part 2: Short Essays

(20 points each)

In 6-8 sentences, answer all of the following questions.

1. How would U.S. states’ tax codes change if U.S. states were Tiebout competitors? Carefully explain your answer.

2. Identify a Machiavellian insight that public choice ignores. How would taking Machiavelli’s insight seriously improve upon existing research? Be specific.

3. “A world totalitarian government could permanently ignore the trade-off between stability and openness.” (Caplan, “The Totalitarian Threat”) Why does Caplan claim this trade-off exists? What existing dictatorship is currently closest to the longevity-maximizing stability-openness trade-off? Explain your answer.

4. Does anarcho-capitalism qualify as a “constitutional change”? If so, does it escape the “endogenous institutions” critique of the social value of constitutional change? Why or why not?