When Comparing Market and Public Sector Decision Making, Which Statement

question 345

Multiple Choice

When comparing market and public sector decision making, which statement is NOT true?

• A) Self-interest is the motivating force in each decision making arena.
• B) In both decision making sectors, majority rule is how things are done.
• C) In both decision making sectors, there are scarcity constraints.
• D) Collective (political) outcomes and economic outcomes may differ.

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Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with output levels.

Average Total Cost

The per-unit production cost, calculated by dividing the overall production expenses by the number of units produced.

Price Taker

An economic term for a market participant that accepts the prevailing prices without influencing them.