Public choice theory assumes that those involved in the public sector are generally motivated by
A) public spirit.
B) altruism.
C) the desire to achieve allocative efficiency.
D) the same factors involved in the private sector.
E) a and b
D
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Which of the following is the most important advantage of using money rather than relying exclusively on barter?
A) The use of money encourages people to diversify and learn to do more things for themselves. B) The use of money encourages people who want to exchange to become more closely acquainted. C) The use of money lowers the cost of locating people with whom to exchange. D) The use of money reduces opportunities for fraud and theft. E) The use of money reduces selfishness because money in itself has no value.
Bid-rigging has all of these features EXCEPT
a. It is a collusive agreement b. The bid-riggers pay a smaller amount than without bid-rigging c. Bid-riggers need an auxiliary mechanism to allocate the good within the bid-riggers d. Bid rigging is usually a legitimate and legal strategy for the buyer-side
Suppose that a negative externality is created by the production of good X. Which of the following statements is correct?
a. The social cost of producing good X includes the private cost plus the cost to bystanders of the externality. b. The increased social cost can be graphed as a decrease in demand. c. The market equilibrium quantity will be the socially optimal quantity as long as the government does not interfere. d. Both a and b are correct.
A company buys new equipment that enables it to supply automobiles at a faster rate. Which SPENT letter does this example apply to?
a. P b. E c. N d. T