Legislation That Offers Immediate and Easily Recognized Benefits, at the Expense

question 194

Multiple Choice

Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted even when economic inefficiency results. This can be expected because of

• A) a lack of incentive for operational efficiency in the public sector.
• B) market failure.
• C) the special-interest effect.
• D) the shortsightedness effect.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, thereby factoring in opportunity costs.

Normal Profit

The level of profit that is necessary for a company to remain competitive in the market, often considered as the minimum return required to cover opportunity costs.

Mass Customisation

A manufacturing and marketing strategy that combines mass production efficiency with personalized customization to meet individual customer preferences.

Continuous-Process Production

Raw materials are continuously transformed by an automated system.