Majority-Rule Voting, Special-Interest Group Effects, Rational Voter Ignorance, Bureaucratic Inefficiency

question 16

Multiple Choice

Majority-rule voting, special-interest group effects, rational voter ignorance, bureaucratic inefficiency, and the shortsightedness effect

• A) reflect irrational behavior by the general population.
• B) are public choice theories that explain why the public sector might fail to achieve efficient policies.
• C) explain why democratic societies need elected officials.
• D) are the causes of efficient public policy decisions.

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Definitions:

Productivity

The measure of the efficiency of production, often quantified as the ratio of outputs produced to inputs used in the production process.

Output Effect

The output effect is the impact on total revenue generated by selling an additional unit of a product or service, assuming the price remains constant.

Production Costs

The total expenses incurred in the process of creating and manufacturing a product.

Substitution Effect

The economic principle that as the price of a good increases, consumers will replace it with cheaper alternatives, whereas if the price decreases, the good will become more preferable.