Question

13. What does it mean that a good is rival in consumption?

14. What kind of good is both excludable and rival in consumption?

18. Why do special interests so have so much power in our political system?

19. Explain the median voter theorem.

20. Why are voters rationally ignorant?

Answer 1

13) A good is rival in consumption when consuming the good by one individual reduces its availability to others. Eg: In a car showroom of 10 cars, if an individual buys 1 car, then the number left for other people would be less.

14) Private goods are both excludable and rival in consumption because they all have price and the consumption of the good by one,reduces its availability to others. Eg: a house

18) Special groups have power in the political system because they either resort to lobbying or have campaigns to gain the public support. Hence they gain power in the system.

eg:an environmental based interest group would influence the public regarding the harms to nature.

19) Median voter theorem indicates that the outcome of any voting system would depend on the outcome which most preferred by the median voter. There are several assumptions that need to be fulfilled in order for the median voter theorem to succeed.

20) Voters are rationally ignorant because they believe that each of them have a very small share in the decision making and hence do not make informed choices by collecting information regarding various parties because these require costs and time and they tend to believe that their influence is extremely small in the whole process. This is the reason many voters are either ignorant or choose not to vote at all.

(You can comment for doubts)