Public Choice Analysis Indicates

question 148

Multiple Choice

Public choice analysis indicates

• A) politicians under representative democracy are led as if by an invisible hand to adopt legislation that enhances the wealth of a nation.
• B) political structures consistent with economic efficiency tend to emerge naturally from the ordinary political process.
• C) constitutional rules establishing procedures and limiting the ability of the political process to engage in redistributive activities can improve the economic efficiency of government.
• D) all of the above are correct.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, which contributes towards covering fixed costs and earning profit.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Units

A measure of quantity that indicates the count or quantity of a product or service.

High-Low Method

An approach to estimate fixed and variable costs using the highest and lowest levels of activity.