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Micro Ch22 Presentation
Micro Ch22 Presentation
PRINCIPLES OF
MICROECONOMICS
FOURTH EDITION
N. G R E G O R Y M A N K I W
PowerPoint® Slides
by Ron Cronovich
Voter Type
Type 1 Type 2 Type 3
% of all voters 35% 45% 20%
1st choice A B C
2nd choice B C A
3rd choice C A B
% of voters
20%
Voter 15%
Theorem 10%
5%
The
The median
median voter
voter
prefers 0%
prefers aa budget
budget
$20 $30 $40 $50 $60 $70 $80
of
of $50
$50 billion.
billion.
Preferred govt budget (billions)
27
A C T I V E L E A R N I N G 2:
Answers
The median voter in Democratic primaries is more
liberal than the median voter in the general
election. So, the Democratic candidate’s best
strategy is to act more liberal during the primaries
and more centrist during the general election.
Similarly, the Republican candidate will want to
appeal more to the median Republican voter
during the primaries, and then appear less
conservative during the general election.
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Behavioral Economics
Behavioral economics: a new field in which
economists apply basic insights from psychology
People aren’t always as rational as traditional
economic models assume.
Herbert Simon viewed humans as satisficers,
people who make choices that are merely
“good enough” rather than optimal.
Other economists have suggested that people are
only “near rational” or exhibit “bounded rationality.”