The Basic Difference Between a Public Bureau and a Market

question 131

Multiple Choice

The basic difference between a public bureau and a market firm is that the bureau

• A)has an incentive to maximize profits
• B)has no incentive to minimize costs
• C)managers do not attempt to maximize their self interest
• D)managers are more likely to be concerned with the public interest than their own self interest
• E)faces a budget constraint placed up it by the voters

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Definitions:

Neoclassical Economists

Economists who focus on how consumers make choices based on their preferences and budgets, and how those choices affect the use of resources and the distribution of goods.

Better Off

A term indicating an improvement in someone's situation or condition, often measured in terms of financial wellbeing, health, or quality of life.

Behavioral Economists

Behavioral economists study how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions, often challenging the assumption of rational decision-making.

Neoclassical Theories

A broad range of economic theories that emphasize the role of supply and demand in an economy, focusing on the allocation of resources and the distribution of income.