Which of the Following Is True of Government Activities Under

question 34

Multiple Choice

Which of the following is true of government activities under a system of representative democracy?

• A) If a majority favors an activity, it must be productive.
• B) If a majority opposes an activity, it must be counterproductive.
• C) When voters pay in proportion to benefits received, productive activities undertaken by the government will be favored by an overwhelming majority of voters.
• D) When voters pay in proportion to benefits received, productive activities will generally be defeated under a majority rule vote.

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Definitions:

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, as calculated in economic theory.

Normal Profits

The minimum level of profit necessary for a company to remain competitive in the market, essentially covering opportunity costs but not generating excess profit.

Purely Competitive

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to price-taking behavior.

Economic Profits

The outcome of subtracting all varieties of costs, including direct and indirect, from overall sales.