List and explain the four key assumptions in the theory of public choice
What will be an ideal response?
The key assumptions in the theory of public choice are (1 ) individuals are motivated by self-interest, which implies individuals will act within the political process to maximize their individual (not collective) well-being, (2 ) opportunity costs exist, which means every government action has an opportunity cost, (3 ) competition is present, which implies elected representatives will always be in competition for available government funds and (4 ) individuals in government face an incentive structure, which means if a bureaucrat provides poor representation, the organization's owners—the taxpayers—have no immediate mechanism for expressing their dissatisfaction.
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A government-sponsored good is one that
A) is desirable to no one but ruled desirable by the court system nonetheless. B) everyone agrees is socially desirable. C) freely competitive markets have determined is socially desirable. D) the political process has determined is socially desirable.
From 1929 to 1932, the total value of the stock market:
A. more than tripled. B. decreased by nearly 90 percent. C. more than quadrupled. D. stayed the same.
If the substitution effect is always greater than the income effect, then an individual's labor supply curve will
a. bend backward b. always have a positive slope c. always have a negative slope d. be vertical e. be horizontal
Assume that corn and soybeans are alternatives that could be grown by most farmers, An increase in the price of corn will
What will be an ideal response?