Problem 1
Suppose that there are 1 million federal workers at the lowest level of the federal bureaucracy and that above them there are multiple layers of supervisors and supervisors-of-supervisors. Assume that each higher level is one-tenth the size of the one below it because the government is using a 10: 1 ratio of supervisees to supervisors. That is, for every 10 workers at the bottom, there is 1 supervisor; for every 10 of those supervisors, there is 1 supervisor-ofsupervisors; for every one of those supervisors-of-supervisors, there is a supervisor-of-supervisors-of-supervisors; and so on, all the way up the bureaucratic pyramid to the president. LO5.1 a. How many supervisors will there be in each supervisory layer of the federal bureaucracy? Start with the layer of supervisors directly above the 1 million workers at the bottom. b. How many supervisors are there in total at all levels of the federal bureaucratic pyramid, including the president? c. If you count the 1 million workers at the bottom as the first layer of the federal bureaucracy, how many total layers are there, including the president? d. How many federal employees are there in total at all layers, including the president? e. What fraction of all federal employees are supervisory, including the president?
Problem 2
Consider a specific example of the special-interest effect and the collective- action problem. In \(2012,\) it was estimated that the total value of all corn production subsidies in the United States was about $$\$ 3$$ billion. The population of the United States was approximately 300 million people that year. \(L 05.2\) a. On average, how much did corn subsidies cost per person in the United States in \(2012 ?\) (Hint: A billion is a 1 followed by nine zeros, A million is a 1 followed by six zeros.) b. If each person in the United States is only willing to spend $$\$ 0.50$$ to support efforts to overturn the corn subsidy, and if antisubsidy advocates can only raise funds from 10 percent of the population, how much money will they be able to raise for their lobbying efforts? c. If the recipients of corn subsidies donate just 1 percent of the total amount that they receive in subsidies, how much could they raise to support lobbying efforts to continue the corn subsidy? d. By how many dollars does the amount raised by the recipients of the corn subsidy exceed the amount raised by the opponents of the corn subsidy?
Problem 3
Consider a corrupt provincial government in which each housing inspector examines two newly built structures each week. All the builders in the province are unethical and want to increase their profits by using substandard construction materials, but they can't do that unless they can bribe a housing inspector into approving a substandard building. \(L O 5.2\) a. If bribes cost $$\$ 1,000$$ each, how much will a housing inspector make each year in bribes? (Assume that each inspector works 52 weeks a year and gets bribed for every house he inspects.) b. There is a provincial construction supervisor who gets to hire all of the housing inspectors. He himself is corrupt and expects his housing inspectors to share their bribes with him. Suppose that 20 inspectors work for him and that each passes along half the bribes collected from builders. How much will the construction supervisor collect each year? c. Corrupt officials may have an incentive to reduce the provision of government services to help line their own pockets. Suppose that the provincial construction supervisor decides to cut the total number of housing inspectors from 20 to 10 in order to decrease the supply of new housing permits. This decrease in the supply of permits raises the equilibrium bribe from $$\$ 1,000$$ to $$\$ 2,500$$. How much per year will the construction supervisor now receive if he is still getting half of all the bribes collected by the 10 inspectors? How much more is the construction supervisor getting now than when he had 20 inspectors working in part \(b\) ? Will he personally be happy with the reduction in government services? d. What if reducing the number of inspectors from 20 to 10 only increased the equilibrium bribe from $$\$ 1,000$$ to $$\$ 1,500 ?$$ In this case, how much per year would the construction supervisor collect from his 10 inspectors? How much less is the construction supervisor getting than when he had 20 inspectors working in part \(b\) ? In this case, will the construction supervisor be happy with the reduction in government services? Will he want to go back to using 20 inspectors?
