According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?
A. If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government.
B. If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition.
C. The additional rewards of a policy to the general population outweigh the additional costs that are imposed on a narrow interest group.
D. Politicians follow their own self-interest and seek to maximize their reelection chances rather than promoting the best interests of society.
Answer: C
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Compared to the situation before international trade, after the United States exports a good production in the United States ________ and consumption in the United States ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Certain goods are related such that an increase in the price of one good decreases the quantity demanded of the other. These goods are
A. complements. B. substitutes. C. luxury goods. D. competing goods.
If a bank has excess reserves of $4,000 and demand deposit liabilities of $100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of
A) $17,000. B) $19,000. C) $24,000. D) $29,000.
Why doesn’t a perfectly competitive firm charge a price slightly higher than the industry price in order to earn extra profit?
What will be an ideal response?