Define logrolling. Explain why logrolling often results in legislation that benefits the economic interests of a few, while harming the interests of a larger group of people
What will be an ideal response?
Logrolling refers to the situation where a member of Congress votes to approve a bill in exchange for votes from other members of Congress on other bills. Members of Congress often sponsor legislation that benefits constituents in their own districts; for example, a new highway. The costs of the highway are paid by taxpayers from all districts. Most of these taxpayers will see little or no benefit from the highway, which creates jobs and provides services mostly within a single Congressional district. Taxpayers outside of the district typically do not oppose the highway for two reasons. First, they often are rationally ignorant; the costs of the highway are spread widely so that each taxpayer incurs a very small part of the total cost. Second, taxpayers in other districts are the beneficiaries of their own projects, which receive, through logrolling, the votes of a majority of members of Congress.
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Pencils sell for 10 cents and pens sell for 50 cents. Suppose Jack, whose preferences satisfy all of the basic assumptions, buys 5 pens and one pencil each semester. With this consumption bundle, his MRS of pencils for pens is 3
Which of the following is true? A) Jack could increase his utility by buying more pens and fewer pencils. B) Jack could increase his utility by buying more pencils and fewer pens. C) Jack could increase his utility by buying more pencils and more pens. D) Jack could increase his utility by buying fewer pencils and fewer pens. E) Jack is at a corner solution and is maximizing his utility.
The dummy variable trap is an example of
A) imperfect multicollinearity B) something that is of theoretical interest only C) perfect multicollinearity D) something that does not happen to university or college students
If government spending increased by $100 billion and the MPS within the economy was 0.25, what would be the total impact on real GDP?
a. $25 billion increase b. $75 billion increase c. $133 billion increase d. $400 billion increase
The aggregate demand curve is the relationship between the:
A. price level and the distribution of real domestic output. B. price level and the purchasing of real domestic output. C. price level and the sales of producers. D. real domestic output bought and the real domestic output sold.