Name_ 1. Explain the median voter model. Why might a minority say that democracy cannot represent them well? 2. Explain why the used car market is both an adverse selection and an asymmetric information problem. 3. What is the free rider problem? How does the government fix this problem? 4. What is a negative externality (also called spillover cost)? Give an example. 5. What is a positive externality (also called spillover benefit)? Give an example. 6. Does a positive externality create an over allocation or under allocation for society? Give two ways in which the government can intervene and solve for positive externalities. 7. Does a negative externality create an over allocation or under allocation for society? Give two ways in which the government can intervene and solve for negative externalities. 8. Why are some paid more than others? Give at least four wage differentials (barriers that explain the differences in pay). Include at least one example that may be an artificial rather than a natural barrier. 9. Give an example of a principal agent problem and a way to fix it. 10. What is the tragedy of the commons? According to economists why does this problem arise? How can it be solved?11. What kind of problems are the following: Asymmetric information, moral hazard problem or adverse selection problem? Government insurance on bank deposits may encourage banks to make risky loans. A woman anticipating having a large family takes a job with a firm, which offers exceptional childcare benefits. Doctors prescribing more healthcare than is necessary