The Quantification of Benefits and Costs of Activity by Public

question 118

Multiple Choice

The quantification of benefits and costs of activity by public officials in an effort to locate the efficient solution is characteristic of the _______ approach to studying public sector choice.

• A) federal budget studies
• B) rational abstention
• C) public interest theory
• D) public choice theory

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Definitions:

Price Elasticity

A calculation that expresses how demand for a certain product varies in reaction to its pricing shifts.

Luxury

Products or services viewed as luxurious and not necessary, frequently linked with premium quality and a high cost.

Necessity

A good or service that is essential for survival and basic well-being, often implying inelastic demand with respect to price changes.

Price Elastic Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with a higher elasticity indicating a greater response.