Economic Theory Implies That the Incentive for a Manager of a Publicly

question 176

Multiple Choice

Economic theory implies that the incentive for a manager of a publicly operated firm (for example, a state university or the post office) to promote internal efficiency of their operations would be

• A) strong because inefficiency is easily detected and leads to the loss of voter support.
• B) strong because public officials are unconcerned about personal gain.
• C) weak because government employees are less educated than employees who work in the private sector.
• D) weak because it is difficult for voters to detect inefficiency and for public officials to gain from actions that would improve the efficiency of government.

---

Definitions:

Batch

A grouping of a number of items processed or produced together as a single lot.

Operating Characteristics Curve

A graphical representation that shows the relationship between the capability of a process and its performance with respect to different criteria.

Acceptance Sampling

A statistical quality control method that involves inspecting a random sample of items from a lot to determine if the entire lot should be accepted or rejected.