Answer the following statements true (T) or false (F)
1. When there are two candidates on one side of the issues and one candidate on the other side of the issues, it can “split the vote” between supporters of the side with two candidates, handing the election to someone who does not have the support of the majority of voters.
2. A special interest group can pressure legislators to enact public policies that do not benefit society as a whole.
3. Special interests are more likely to arise from a group that is relatively anonymous, rather than from a group where there is already a lot of public scrutiny.
4. The median voter theory argues that politicians will try to match policies to what pleases the majority of voter preferences.
5. The theory of comparative advantage explains that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost.
1. True
This statement is true. Suppose an election ends up including two liberal candidates and one conservative? It is possible that the liberal vote will split and victory will go to the minority party. In this case, the outcome does not reflect the majority’s preference.
2. True
This statement is true. A special interest group can pressure legislators to enact public policies that do not benefit society as a whole.
3. False
This statement is false. Special interests are more likely to arise from a group that is easily identifiable, rather than from a group where some of those who suffer may not even recognize they are bearing costs.
4. False
This statement is false. The median voter theory argues that politicians will try to match policies to what pleases the median voter preferences. If we think of political positions along a spectrum from left to right, the median voter is in the middle of the spectrum.
5. True
This statement is true. The theory of comparative advantage explains that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost.
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In the short run, when production goes up what typically happens to total variable costs?
What will be an ideal response?
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A perfectly competitive hardware manufacturer has total revenue of $85 million, total variable costs of $45 million, and fixed costs of $10 million. What is the firm's producer surplus?
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