Madison is a third-grade public school teacher who doesn't own a car and uses public transportation. According to public choice theory, which of the following four politicians for a public office would Madison be most likely to vote for in the upcoming election?
a. Politician A proposes increasing the property tax on personal automobiles and using the money to increase teacher salaries by 10 percent.
b. Politician B proposes an across-the-board increase in state income tax rates and using the money to increase the benefits paid to unemployed workers.
c. Politician C proposes increasing the property tax on personal automobiles and using the money to increase the benefits paid to unemployed workers.
d. Politician D proposes an across-the-board increase in state income tax rates and using the money to improve the highway system.
A
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In the figure above, the redistribution from the consumers to the producer if the firm is a single-price, unregulated monopoly rather than a perfectly competitive industry is
A) zero. B) $8.00 per day. C) $16.00 per day. D) $32.00 per day.
An increase in the expected future marginal product of capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
An owner of local salon realized that by decreasing the prices for haircuts, his revenue increased. This implies that
a. The demand for haircuts is elastic b. The demand for haircuts is inelastic c. The demand for haircuts is unitary elastic d. The demand for haircuts is perfectly elastic
If waitresses and taxi drivers do not report all of their income to the government, GDP will be understated. This is because the unreported income
a. involves the introduction of new goods. b. is part of the underground economy. c. is an example of nonmarket production. d. represents an increase in leisure time.