Name:_______________________

Economics 854 Final

Prof. Bryan Caplan

Spring, 2016

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: Rational irrationality in democratic elections is Pareto efficient but not Kaldor-Hicks efficient.

2. T, F, and Explain: The Enlightened Preference approach tests public opinion for systematically biased descriptive beliefs.

3. T, F, and Explain: Strictly speaking, the “Paradox of Revolution” predicts that large political changes will never occur.

4. Suppose U.S. Presidents served for a single eight-year term with no possibility of re-election, rather than a four-year term with a chance for re-election.

T, F, and Explain: Theoretically, this will lead to less socially efficient policies.

Part 2: Short Essays

(20 points each)

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

1. Does Gelman et al. (“Rich State, Poor State, Red State, Blue State: What’s the Matter with Connecticut?”) strengthen or weaken the evidence for group-interested voting? Carefully explain your answer.

2. “Correlation between information and interests seem like a strong objection to the Miracle of Aggregation.” (Caplan, Myth of the Rational Voter) Explain Caplan’s position on this issue. How would Wittman likely respond?

3. Identify one constitutional provision from any country and time period with a big effect on policy; i.e., if the provision did not exist, the country would adopt markedly different policies. How is this possible?

4. What has the growth of the Internet shown about the viability of moderate privatization of rule formation, dispute resolution, and enforcement? The viability of radical privatization?