What are factors that impede the attainment of economic efficiency in the public sector?
Factors that impede the attainment of economic efficiency in the public sector are called: <market failures. <externalities. <government failures.
Which one of the following topics would be of most interest to a public choice economist?
use the tools of economics to analyze decision making, politics, and elections in the public sector. Which one of the following topics would be of the most interest to a public choice economist? “Government failure” is a prominent topic in: public choice theory.
Which of the following would best explain why regulatory capture is a problem?
Which of the following would best explain why regulatory capture is a problem? The regulations implemented serve the private interests of the regulated industry, rather than addressing social interests such as consumer safety and environmental protection.
Which statement best describes a special interest issue quizlet?
Which statement best describes a special-interest issue? It is a program or policy in which a large number of people will suffer small costs, while a small number will receive large gains.
What are some examples of economic inefficiency?
- Imperfect market operation. Market imperfections.
- Unsatisfactory retail banking.
- Restrictive trade practices.
- Economic inflation.
- Restricting business practices.
What is the problem of economic efficiency?
Economic Efficiency and Scarcity
Therefore, there are not sufficient resources to ensure that all aspects of an economy function at their highest capacity at all times. Instead, scarce resources must be distributed to meet the needs of the economy in an ideal way while also limiting the amount of waste produced.
What failure refers to economically inefficient outcomes caused by shortcomings in the public sector?
Government failure. Refers to economically inefficient outcomes caused by shortcomings in the public sector. Principal-agent problems. Conflicts that arise when tasks are delegated by one group of people to another group of people. Special-interest effect.
Which would be an avenue for resolving the inefficiencies associated with majority voting?
which would be an avenue for resolving the inefficiencies associated with majority voting? loan guarantees provided by government will reduce the willingness of investors to take on the risk in a project.
Why does the market system fail to produce public goods quizlet?
The market system does not produce public goods because: private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them. Public goods are those for which there: are nonrivalry and nonexcludability.
Which of the following roles does the government fulfill in the economy?
The government (1) provides the legal and social framework within which the economy operates, (2) maintains competition in the marketplace, (3) provides public goods and services, (4) redistributes income, (5) cor- rects for externalities, and (6) takes certain actions to stabilize the economy.
Which statement best describes the difference between an open and a closed primary quizlet?
Which statement best describes the difference between an open and a closed primary? Only voters who are registered members of a party can vote in a closed primary, while independent voters can vote in open primaries.
What is one effect of businesses lobbying the government?
Lobbying facilitates communication between the public and lawmakers. Lobbying creates an advantage in government for wealthier citizens and corporations. Lobbying reduces opportunities for corruption in government because it reduces the role of money.
What causes economic inefficiency?
Market inefficiencies exist due to information asymmetries, transaction costs, market psychology, and human emotion, among other reasons. As a result, some assets may be over- or under-valued in the market, creating opportunities for excess profits.
What causes production inefficiency?
Productive inefficiency occurs when a firm is not producing at its lowest unit cost. Unit cost is the average cost of production, which is found by dividing total costs of production by the number of units produced.
What affects economic efficiency?
Economic efficiency encourages a balance of losses and gains for suppliers and consumers. By achieving production efficiency, a business may experience a loss in producing one item in favor of another while experiencing the benefit of increased demands for other services.
When government action leads to inefficiency it is known as?
Government intervention intended to correct market failure can often lead to an inefficient allocation of resources, known as government failure. Other economists argue that markets are recognizably imperfect, but market failure is improperly framed.
Why do markets fail to achieve economic efficiency?
Markets fail under any of three conditions: production has increasing economies of scale; goods in the market are public; or production or consumption has externalities.
Which of the following would be an avenue for resolving the inefficiencies associated with majority voting quizlet?
Which would be an avenue for resolving the inefficiencies associated with majority voting? summing vertically the individual demand curves for the public good. accepted; the public good is produced, even though it is economically inefficient.
What is political logrolling?
Logrolling is the process by which politicians trade support for one issue or piece of legislation in exchange for another politician’s support, especially by means of legislative votes (Holcombe 2006).
How does public goods lead to market failure?
Summary: Public goods constitute a market failure because: 1) lack of enforceable property rights (nonexcludable), 2) not a divisible homogenous products (nonrival). The private market has no incentive to provide such goods, hence market failure.
Which is a problem for the production of public goods quizlet?
Public goods problems are often closely related to the “free-rider” problem, in which people not paying for the good may continue to access it. Thus, the good may be under-produced, overused or degraded.
What are the advantages and disadvantages of government involvement in the economy?
Command economy advantages include low levels of inequality and unemployment and the common objective of replacing profit with equality as the primary incentive of production. Disadvantages of command economies include lack of competition, which can lead to lack of innovation, and lack of efficiency.
Can government policies be used to improve economic performance?
One of the most common ways that a government may attempt to influence a country’s economic activities is by adjusting the cost of borrowing money. This is most often done by lowering or raising the federal funds rate, a target interest rate that impacts short-term rates on debt such as consumer loans and credit cards.
Which of the following describes a fundamental difference between political parties and interest groups quizlet?
Which of the following describes a fundamental difference between political parties and interest groups? Political parties represent broad arrays of issues, whereas interest groups are more likely to focus on narrow sets of issues.
What is the most striking irony involving local government in the United States quizlet?
What is the most striking irony involving local government in the United States? It is the most accessible but has the least amount of citizen involvement.