HJ Chang

Question 1

Rent seeking

Economic rent

Answer 1

Lobby for special privileges

Returns in excess of competition level- indicate a monopoly or other imperfect compe

Question 2

Medium voter theorem

Answer 2

Political parties pitch the policies around the centre of opinion, Where votes concentrate leaving no real choice

Question 3

Rational ignorance

Answer 3

Single votes don’t change anything

Question 4

Time shifting/what Blair does

Answer 4

Voting for benefits that enjoyed today such as Debt funded new roads but which will be paid for by FutureTech text payers

Question 5

Gov failure

Answer 5

Self seeking by those who operate in the public realm means policies that pander to their interests not the ones that improve social welfare are adopted

Question 6

Eva of public goods as a mkt. failure so need gov solution

Answer 6

Solved by tech: light houses
Streetlights solves by car headlights
Defence does not have solution

Question 7

Eva of inst set boundaries of market

Answer 7

Black market

Question 8

Infant industry

Answer 8

Certain industries have a possible comparative advantage but have not yet exploited sufficient economies of scale to bring the unit cost down to competitive levels. short term protectionist allow infant industry to develop a cost advantage At which point protection can be relaxed, leaving the industry to trade more freely on international market. the risk is that these subsidies might become semipermanent

Question 9

Export sub

Answer 9

Lower cost of domestic production

Question 10

Primary product dependency

Answer 10

Low value added primary products account for large proportion of export

Question 11

Industrial policies

Answer 11

Shift to higher value added products

Socialise risk

Question 12

Indicative planning

Answer 12

Government sets broad eco targets concerning key economic variables including investment in strategic industries infrastructure exports