What are the four types of bias that economist Bryan Caplan believes voters bring with them when they vote? Briefly explain each of these biases
What will be an ideal response?
Anti-market bias: Voters underestimate the economic benefits of the market system.
Anti-foreign bias: Voters underestimate the economic benefits of interaction with foreigners.
Make-work bias: Voters assume that job creation implies economic progress.
Pessimistic bias: Voters underestimate the performance of the economy.
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Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: Name of CompanyRevenuesCost of Purchased inputsCitrus Growers Inc.$0.750Florida Jam Company$2.00$.75The Corner Store$2.50$2.00If the oranges were grown and the jam produced in the year 2015, but the marmalade was sold at The Corner Store in the year 2016, what is the contribution of these transactions to GDP in the year 2015?
A. $2.50 B. $2.75 C. $2.00 D. $1.25
Explain why GDP was never intended to be a measure of social well being.
What will be an ideal response?
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
If there are external benefits associated with the consumption of a good or service
A. the private demand curve will underestimate the true demand curve. B. the market demand curve will be the vertical summation of the individual demand costs. C. the private demand curve will overestimate the true demand curve. D. consumers will be willing to pay for all these benefits in private markets.