Figure 1 Illustrates a Situation of a Unicameral Legislature in Which

question 7

Multiple Choice

Figure 1 illustrates a situation of a unicameral legislature in which there is a median voter (MV) and a status quo policy (SQ) arrayed along a single left-right issue dimension that runs from 0 (most left) to 10 (most right) . The MV is assumed to have a single-peaked utility function and to vote for the policy that is located closest to her ideal point. Assume that a voter will vote for a new policy over the status quo if she is indifferent between them.
Figure 1: Illustrating a Unicameral Legislature

-If the median voter in the legislature in Figure 1 gets to propose a new policy, what would she propose?

• A) 2
• B) 3
• C) 4
• D) 5
• E) 6
• F) 7
• G) 8

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, also known as shareholders' equity.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Dividends Payable

Dividends payable are a liability on a company's balance sheet representing the amount of dividends that the company has declared but has not yet paid out to its shareholders.

Dividends Expense

The sum distributed from a portion of a company's earnings to its shareholders; often associated with preference shares.