Briefly explain how public choice economists feel about the role of special interest groups in the government.
What will be an ideal response?
Public choice economists believe that if government becomes a vehicle for promoting special interests, it fails in its primary responsibility of expanding opportunities for all. That is, instead of creating opportunities to benefit through productive cooperation with each other, government will have created the illusion that people can benefit at the expense of each other. Public choice economists are not callously indifferent to the social benefits that government can provide. In fact, the difference between public choice economists and those who see every social ill as justification for expanding government is not a difference in moral vision. Instead, it is a difference in their interpretation of how government works. Public choice economists lean toward less government not because they want less from government, but because they, like many others, want less waste from government.
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For a given production possibilities frontier, which points are attainable?
A. Points inside the frontier B. Points outside the frontier C. Points on or outside the frontier D. Points on the frontier only E. Points on or inside the frontier
Which of the following statements is an example of normative economic analysis?
A) Pollution regulations have raised the cost of production for energy companies. B) As the wage rate increases, companies are hiring fewer workers. C) Improvements in technology have reduced the time needed to manufacture automobiles. D) Tablet computers should be manufactured in countries that do not restrict internet access to their citizens.
If Happy Cows, a milk producer, purchases a dairy farm, this is an example of _______
A) backward integration B) forward integration C) divestiture D) outsourcing
A reduction in world oil supplies is likely to cause
A) an increase in aggregate demand and a decrease in the equilibrium price level. B) a decrease in equilibrium price level and an increase in real Gross Domestic Product (GDP). C) an increase in equilibrium price level and an increase in real Gross Domestic Product (GDP). D) a reduction in aggregate supply, a rise in the equilibrium price level, and a fall in real Gross Domestic Product (GDP).