Explain the special-interest effect
Please provide the best answer for the statement.
The special-interest effect is a situation where a small number of people will receive large gains at the expense of a much larger number of people who individually suffer small losses. The small group will be well-informed and highly vocal on the issue and press politicians for approval. The large number of people who will each suffer only small losses will not have the incentive to be informed or feel strongly about the issue. The result is that the politicians will support the special-interest program, whose supporters will vote in their favor, and the politicians will ignore the majority who do not feel strongly about the issue.
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Refer to Figure 4-15. For each unit sold, the price sellers receive after the tax (net of tax) is
A) $20. B) $22. C) $27. D) $32.
Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because
a. They lose market power b. There is an increase in the overall demand for their products c. The bundle has a more elastic demand than individual goods d. The bundle has a more inelastic demand than individual goods
If the demand for a good falls when income falls, then the good is called a(n)
a. normal good. b. regular good. c. luxury good. d. inferior good.
A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 30 and the marginal utility of product Beta is 40. The price of product Alpha is $5 and the price of product Beta is $10. The utility-maximizing rule suggests that this consumer should: