The Methodology of Public Choice Analysis

question 76

Multiple Choice

The methodology of public choice analysis

• A) develops a logically consistent theory based on how individual actors (such as voters, politicians, and bureaucrats) respond to incentives.
• B) assumes that all decisions made by individual actors in the public sector are done with the public interest in mind, rather than their private interests.
• C) assumes that individuals generally react to the incentives they face when making choices in the private sector but not in the public sector.
• D) focuses on the development of a single theory of government as a whole rather than on analyzing the choices made by individual agents in the public sector.

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Definitions:

Two-tailed Test

A statistical hypothesis test in which the area of interest is in both tails of the probability distribution, considering both directions of an effect.

Level Of Significance

The threshold used to determine the statistical significance of an observed effect; denoted by alpha, typically set at 0.05 or 5%.

P-value

The chance of obtaining test outcomes that are as drastic as, or more drastic than, the ones actually observed, under the premise that the null hypothesis is right.