Refer to Table 18-4. The table above outlines the rankings of ...

[mcmcdaniel]

Refer to Table 18-4. The table above outlines the rankings of three members of the U.S. House of Representatives on three spending alternatives.
 
  Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom, Dick, and Harriet, all members of the House of Representatives, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1 ) Foreign Aid and Post-Secondary Education (2 ) Foreign Aid and Roads and Bridges and (3 ) Post-Secondary Education and Roads and Bridges.
 
  Determine whether the voting paradox will occur as a result of these votes.

Question 2

The most profitable price for a monopolist is
 
  A) the price at which demand is unit elastic.
  B) a price that maximizes the quantity sold.
  C) the highest price a consumer is willing to pay for the monopolist's product.
  D) the price for which marginal revenue equals marginal cost.

[zhanghao]

Answer to Question 1

First vote:
Foreign Aid Post-Secondary Education Selection
Tom 3rd 1st Post-Secondary Education
Dick 2nd 3rd Foreign Aid
Harriet 1st 2nd Foreign Aid

First vote: the majority votes for spending on Foreign Aid.

Second vote:
Foreign Aid Roads and Bridges Selection
Tom 3rd 2nd Roads and Bridges
Dick 2nd 1st Roads and Bridges
Harriet 1st 3rd Foreign Aid

Second vote: the majority votes for spending on Roads and Bridges.

Third vote:
Post-Secondary Education Roads and Bridges Selection
Tom 1st 2nd Post-Secondary Education
Dick 3rd 1st Roads and Bridges
Harriet 2nd 3rd Post-Secondary Education

Third vote: the majority votes for spending on Post-Secondary Education.
The results of the voting process do illustrate the voting paradox because the preferences of Tom, Dick, and Harriet are not transitive. If their preferences were transitive, we would find that if the voters prefer to spend on Foreign Aid rather than Post-Secondary Education (the result of the first vote), and they prefer to spend on Roads and Bridges rather than oreign Aid (result of the second vote), they should prefer to spend on Roads and Bridges rather than Post-Secondary Education. In fact, they prefer to spend on Post-Secondary Education rather than Roads and Bridges (the result of the third vote). This is an example of the voting paradox, which is defined as the failure of majority voting to always result in consistent choices.

Answer to Question 2

D