Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
To an economic naturalist, this model helps explain why political candidates:
A. are loyal to their political parties.
B. work to bring federally funded projects to their home districts.
C. move toward more centrist positions during campaign season.
D. take more extreme positions than are held by the general population.
Answer: C
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In the figure above, if there is no Ricardo-Barro effect, the government has a budget ________ because the ________
A) surplus of 0.2 trillion; SLF curve lies to the right of the PSLF curve. B) deficit of 0.2 trillion; SLF curve lies to the right of the PSLF curve. C) deficit of 0.4 trillion; SLF curve shows a smaller quantity of LF than the PSLF curve. D) surplus of 0.4 trillion; SLF curve shows a larger quantity of LF than the PSLF curve. E) surplus of -0.2 trillion; SLF curve lies to the right of the PSLF curve.
Production efficiency occurs
A) anywhere inside or on the production possibilities frontier. B) when the total cost of production is minimized. C) at all points on the production possibilities frontier. D) at only one point on the production possibilities frontier. E) at all points inside the production possibilities frontier.
Everything else held constant, in the market for reserves, when the federal funds rate is 5%, lowering the discount rate from 5% to 4%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
Suppose that opportunity costs are constant and that Gorge can either bake a maximum of six pies or three cakes in a day. Brandi can either produce a maximum of eight pies or two cakes in a day. Brandi's opportunity cost to produce one cake is
A. six pies. B. two pies. C. four pies. D. one-half pie.