Public Choice Theorists Argue That the Provision of Public Goods

question 69

Multiple Choice

Public choice theorists argue that the provision of public goods tends to be economically inefficient because

• A) the private sector will always provide those goods even if the government does not.
• B) government officials are generally more stupid, lazy, or corrupt than their private-sector counterparts.
• C) it leads the economy to operate outside the production possibilities curve.
• D) to stay elected, politicians frequently adopt programs that benefit a great number of people who each gain very little at the expense of a small group of people who each lose very much.
• E) all a voter is able to do is vote for a candidate who favors that group of programs closest to those favored by the voter.

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Definitions:

Labor Unions

Organizations that represent the collective interests of workers, negotiating wages, benefits, and working conditions with employers.

Mainstream Economics

The dominant school of thought in economics, focusing on the analysis of market behavior and the allocation of resources through the price mechanism.

Institutional Labor Economics

A branch of economics that studies the way institutions and societal norms impact labor markets, employment, and wage setting.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, and easy entry and exit for businesses, leading to optimal distribution of resources.