What Is the Assumption Underlying Public-Choice Theory

question 115

Multiple Choice

What is the assumption underlying public-choice theory?

• A) Elected officials believe in cooperating with one another and they seek to avoid competition among themselves.
• B) The costs and benefits of being efficient are the same whether one is in the private sector or in the public sector.
• C) Individuals act within the political process to improve their own individual well-being.
• D) Resources in the public sector are not scarce.

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Definitions:

Material Costing

The process of determining the cost of materials used in the production of goods, including direct materials and allocable portions of indirect materials.

Standard Materials Cost

The pre-determined cost of materials that is expected to be incurred under normal conditions.

Price Variance

The difference between the actual cost of a good or service and its expected cost, often used in budgeting and financial analysis.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, used in variance analysis.