What is public choice theory?
What will be an ideal response?
Public choice theory is an economic theory that the public officials who set economic policies and regulate the players act in their own self-interest, just as firms do.
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With expansion in the level of output, total fixed cost:
a. declines but remains positive. b. increases. c. falls to zero. d. remains constant. e. becomes negative.
Compared to 1968, in 2008 income distribution would be considered
A. much more equal. B. somewhat more equal. C. about as equal. D. Much less equal.
A nation can determine how close it is to the classical range by considering its:
a. Export position. b. Net export position. c. Capacity utilization index. d. Exchange rate. e. All of the above.
Suppose Smith's oil refinery and Jones's paper mill both pollute a river and both firms operate under a system of marketable pollution permits. If it costs Smith $45 to reduce pollution by 500 gallons per day, and Jones can reduce costs by $65 by increasing pollution by 500 units per day:
A. the firms cannot gain by trading the right to pollute. B. both firms can benefit if Smith trades the right to increase pollution by 500 gallons to Jones for $30. C. both firms can benefit if Smith trades the right to increase pollution by 500 gallons to Jones for $50. D. both firms can benefit if Jones trades the right to increase pollution by 500 gallons to Smith for $30.