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32. Bowen’s model to proxy public-goods demands is known as the a. median voter

ID: 1126426 • Letter: 3

Question

32. Bowen’s model to proxy public-goods demands is known as the

a.   median voter model.

b.   capture theory model.

c.   rent-seeking model.

d.   Lindahl pricing model.

36. To obtain efficiency in the Bowen–Samuelson sense in the context of Lindahl pricing, total output of the good will be at the level where

a.   MC = MR.

b.   profit is maximized.

c.   MC = total demand.

d.   none of the above.

38. __________ and __________ extended Wicksell’s analysis of the public sector.

a.   Averch / Johnson

b.   Buchanan / Tullock

c.   Stigler / Friedland

d.   Peltzman / Demsetz

Explanation / Answer

32) Bowen considered voting is the closest substitute for consumer choice and thus his model is known as median voter model. The answer is a.

36) In Lindahl model, each individual is required to pay a tax rate just equal to the individual’s marginal utility from the good. Samuelson considers the sum of the marginal rates of substitution should be equal to the marginal rate of transformation between the public and private good.

Thus, ais the correct answer

38) averch and Johnson extended Wicksell’s analysis of the public sector. Answer is a.

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