Suppose there is a society in which individual utility about tariff policy is de- scribed by...

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Suppose there is a society in which individual utility about tariff policy is de- scribed by the function u₁(t) = -t - t, where t is the tariff rate chosen and t is the ideal tariff rate for individual i. Suppose further that this society has 11 citizens A, B, C, D, E, F, G, H, I, J, K} with the following respective values of t: {2, 7, 30, 0, 4, 4, 16, 12, 25, 6, 14}. (a) Suppose that society decides on the tariff rate in repeated elections with competition between two political parties who care only about winning office. What policy will be adopted in equilibrium? Explain. (b) Suppose there is a revolution and citizens {A, B, C, D} are declared ineligible to vote under the new constitution. What tariff policy will this society adopt under the new rules? Suppose there is a society in which individual utility about tariff policy is de- scribed by the function u₁(t) = -t - t, where t is the tariff rate chosen and t is the ideal tariff rate for individual i. Suppose further that this society has 11 citizens A, B, C, D, E, F, G, H, I, J, K} with the following respective values of t: {2, 7, 30, 0, 4, 4, 16, 12, 25, 6, 14}. (a) Suppose that society decides on the tariff rate in repeated elections with competition between two political parties who care only about winning office. What policy will be adopted in equilibrium? Explain. (b) Suppose there is a revolution and citizens {A, B, C, D} are declared ineligible to vote under the new constitution. What tariff policy will this society adopt under the new rules?

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a In a repeated election scenario where two political parties compete to win office the policy adopted in equilibrium will depend on the preferences o... View the full answer