Public choice theory emphasizes the role of self-interest in public decision-making.
Answer the following statement true (T) or false (F)
True
A central tenet of public choice theory is that bureaucrats are just as selfish (utility maximizing) as everyone else.
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Consider a consumer with a choice set that emerges from an exogenous income I. Suppose that, as a result of changes in a consumer's economic circumstances, the budget line rotates outward, with the vertical intercept remaining unchanged but the horizontal intercept shifting to the right. How could this have happened if the price of the good on the horizontal axis did not change?
What will be an ideal response?
The firm whose short-run cost curves are given in Exhibi has a long-run fixed cost of
A. $0. B. $2. C. $3. D. $4.
When bankers make loans they do not have an adverse selection problem
Indicate whether the statement is true or false
A fishing boat owner sells her entire catch of 8,000 fish and maximizes profit that is equal to $4,000 . Suppose fish prices increase and you are asked to calculate her profit knowing that she now sells 10,000 fish. If fish prices increased by $1 per fish, what do you need to know to calculate her new profit level?
a. average fixed cost b. average variable cost c. change in average total cost d. marginal cost e. average total cost