Question 1 of 4

Work It Out

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You must read each slide, and complete any questions on the slide, in sequence.

Let’s walk through the median voter theorem in a little more detail. Consider a town with three voters, Enrique, Nandini, and Torsten. The big issue in the upcoming election is how high the sales tax rate should be. As you’ll learn in macroeconomics (and in real life), on average, a government that wants to do more spending has to bring in more taxes, so “higher permanent taxes” is the same as “higher government spending.” Enrique wants low taxes and small government, Nandini is in the middle, and Torsten wants the biggest town government of the three. Each one is a stubborn person, and his or her favorite position—what economic theorists call the “ideal point”—never changes in this problem.Their preferences can be summed up like this, with the x denoting each person’s favorite tax rate:

Suppose there are two politicians running for office, N and O (so ignore P for now). Enrique will vote for , Nandini will vote for and Torsten will vote for . Candidate will win the election.

Correct! Voters will choose the candidate closest to their preferred position so in this case Enrique votes for N since he is closer than O, while Nandini and Torsten cast their votes for O for the same reason. O wins due to earning a majority.

Sorry! Consider who each person will vote for given each candidate’s position relative to each person’s “ideal point.” To review the median voter theorem, please see the section “Two Cheers for Democracy.”

O drops out of the campaign after the local paper reports that he hasn’t paid his sales taxes in years. P enters the race, pushing for higher taxes, so it’s N vs. P. Voters prefer the candidate who is closest to them. Enrique will vote for , Nandini will vote for and Torsten will vote for . Candidate will win the election.

4:47

Correct! Voters will choose the candidate closest to their preferred position so in this case Enrique votes for N since he is closer than P, while Nandini and Torsten cast their votes for P for the same reason. P wins due to earning a majority.

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In Question 2, you decided who was heading for a loss. You get a job as the campaign manager for this candidate just a month before election day. You advise her to retool her campaign and come up with a new position on the sales tax. Of course, in politics as in life, there’s more than one way to win, so give your boss a choice. From the list provided, choose a position on the sales tax to provide her which would beat the would-be winner from Question 2. The red asterisk (*) in each choice denotes your recommended position.

The two options you recommended in Question 3 are:

closer to the median voter’s preferred option than the loser’s old position, so in this case, the median voter theorem is roughly false.

further away from the median voter’s preferred option than the loser’s old position, so in this case, the median voter theorem is roughly false.

further away from the median voter’s preferred option than the loser’s old position, so in this case, the median voter theorem is roughly true.

closer to the median voter’s preferred option than the loser’s old position, so in this case, the median voter theorem is roughly true.

Question 1 of 4

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