Growing Voter Income Can Lead to the Growth of the Government

question 49

Multiple Choice

Growing voter income can lead to the growth of the government sector because

• A)public goods are income elastic.
• B)public goods are income inelastic.
• C)richer voters are more likely to be rationally ignorant.
• D)richer voters do not care about overprovision of government goods.
• E)as income increases,more public goods become private goods.

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Definitions:

Long-Run Equilibrium

A state in economics where all factors of production are fully adjustable, leading to a situation where no economic agent has an incentive to change its behavior.

Monopolistic Competition

A marketplace setup in which a wide range of companies vend products that are comparable but not clones, enabling some level of market sway.

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit.

Marginal Revenue

The additional income generated from the sale of an additional product unit, emphasizing its role in determining optimal production levels.