midterm-2007 - Economics 310-2 Spring 2007 Professor Jeff...

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Unformatted text preview: Economics 310-2 Spring 2007 Professor Jeff Ely Midterm Exam Instructions: There are four questions with equal weight. You have 90 minutes to complete the exam. Please remember that your explanations are at least as important as the answers you give. Explain your answers carefully. Also, please indicate on your bluebooks which discussion section you attend so that we can return your graded exam to you. 1. Consider the following social welfare function. Individuals express their preferences. For each alternative A , we count the number of individuals who rank A last (last- place votes.) The alternative with the most last-place votes is placed at the bottom of the social ranking. Next, we remove that alternative from the individuals rankings and for the remaining alternatives, we recount the number of last-place votes. The alternative with the most last-place votes is then put second-to-last in the social ranking. We continue in this fashion until all alternatives are ranked. There are 11 individuals divided into three groups. The preferences for individuals in the same group are the same and are given below. Group 1) A B C (5 individuals) Group 2) C A B (4 individuals) Group 3) C B A (2 individuals) By comparing the previous list of preferences to the one below, show why the social welfare function described above violates IIA....
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midterm-2007 - Economics 310-2 Spring 2007 Professor Jeff...

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