A Government That Uses a Bureau Rather Than a Private

question 33

Multiple Choice

A government that uses a bureau rather than a private firm to provide some good or service

• A)may have less opportunity for officials and legislators to reward friends and supporters with jobs
• B)will always incur higher costs of production
• C)will lose the ability to make decisions via the hierarchy of the market
• D)may be better able to control details of production
• E)will not be able to sell the good or service after it is produced

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Definitions:

Economic Efficiency

A state where resources are allocated in the most effective way possible, maximizing output without wasting any inputs, ensuring that goods and services are produced at the lowest possible cost and distributed to those who value them most.

Deregulation

The process of removing or reducing government controls and restrictions in an industry to allow for more competition and efficiency.

Pork-Barrel Politics

The allocation of government spending for localized projects secured primarily to bring money to a representative's district, often without proper consideration of the benefits or costs.

Principal-Agent Problem

The principal-agent problem occurs when there is a conflict of interest between a principal (owner or shareholder) and an agent (manager or executive) due to differing goals, with the agent potentially making decisions that benefit themselves at the expense of the principal.