Economic Theory Indicates That the Behavior of

question 149

Multiple Choice

Economic theory indicates that the behavior of

• A) government employees differs from the behavior of employees in the private sector because government employees generally disregard their own personal self-interest when making decisions.
• B) elected public officials differs from the behavior of all other individuals in society because they are not influenced by private interests.
• C) individuals when they make decisions about who to vote for is very different from the behavior of these same individuals when they make other types of choices.
• D) voters, government employees, and public officials is best understood by applying the same basic principle we use to predict the behavior of people in the private sector--that incentives matter.

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Definitions:

MR = MC Output

The output level where marginal revenue equals marginal cost, indicating the profit-maximizing level of production for a firm.

Economic Profit

The distinction in total financial gain and the entirety of expenses, involving both acknowledged and unacknowledged costs.

Total Revenue

The total amount of money generated by a business from the sale of goods or services before any expenses are deducted.

Short-Run Supply

The quantity of goods a firm is willing and able to supply to the market at different price levels in a short-term period, typically assuming some inputs are fixed.