Public Choice Theory Indicates Someone Who Spends More Time Evaluating

question 98

Multiple Choice

Public choice theory indicates someone who spends more time evaluating which tennis racket to buy than deciding which U.S. Senate candidate to support

• A) is behaving irrationally.
• B) is behaving rationally, given the structure of incentives confronted.
• C) will likely be responsible for electing the wrong senator.
• D) is failing to maximize his own personal utility.

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Definitions:

Marginal Utility

The additional satisfaction or benefit received by a consumer from consuming one more unit of a good or service.

Consumer Equilibrium

A state in microeconomics where a consumer achieves the highest satisfaction possible, given their income constraints and prices of goods and services.

Prices

The amount of money required to purchase a good or service, reflecting the value placed on it by the market.

MU/P

The ratio of marginal utility (MU) to price (P), representing the additional satisfaction gained per unit of currency spent.