When Analyzing Public Sector Decision Making, Economic Theory Assumes That

question 357

Multiple Choice

When analyzing public sector decision making, economic theory assumes that voters, politicians, and government officials will

• A) respond to changes in personal benefits and costs when making public sector choices.
• B) pursue the public interest even when it conflicts with their private interests.
• C) pursue primarily public interests because competition is less intense in the public sector.
• D) do none of the above.

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Definitions:

Free Trade

Worldwide trading conducted without interference through tariffs, quotas, or restrictions, following its inherent course.

Accounting Profits

The net income of a company calculated by subtracting total expenses from total revenues, following accounting rules.

Natural Monopoly

A market condition where due to high fixed costs or unique resources, a single firm can supply a product or service at a lower cost than any potential competitor, thus dominating the market.