Using the Figure Above,suppose There Are Two Political Parties,the Hawks

question 148

Multiple Choice

Using the figure above,suppose there are two political parties,the Hawks and the Doves,which agree on all issues except for the quantity of defense satellites.The Hawks want 300 satellites and the Doves want 100 satellites.The voters are well informed and know what is best for them.The parties run a voter survey and discover the marginal benefit curve (MB) .They also know the marginal cost curve (MC) .What quantity of satellites will most likely result from this political process?

• A) 200, because unless each party proposes 200 satellites, the other party can beat it in an election
• B) 300, because the Hawks are more likely to win
• C) 100, because the Doves are more likely to win
• D) 200, because the parties will strike a deal: each will agree to give up 100 satellites
• E) Zero, because given the marginal benefit and the marginal cost of satellites, none should be provided.

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Definitions:

Planning

The process of creating and maintaining a plan, which involves setting objectives, determining strategies to achieve those objectives, and organizing resources.

Controlling

In management, refers to the process of monitoring performance, comparing it with goals, and taking corrective action as needed.

Finance

The management of large amounts of money, especially by governments or large companies.