The federal government incentive to support special-interest groups (steel, auto, drug, environment) at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers) occurs
(a) only when the benefits that accrue to the special-interest group exceed the costs
imposed on others.
(b) when nonspecial-interest voters are unconcerned or uninformed about the issue, and
campaign funds are readily available from the special-interest group.
(c) only if the government action is efficient.
(d) only if the government action will reduce the monopoly power of business or labor,
and thereby lead to an improvement in the general welfare.
(b)
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Refer to the information provided in Figure 2.3 below to answer the question(s) that follow.
Figure 2.3Refer to Figure 2.3. The law of ________ opportunity costs is best depicted by the production possibilities frontier in Panel A.
A. increasing B. constant C. decreasing D. zero
In the figure, when the real wage rate is $10 an hour, ________
A) a shortage of labor exists and the real wage rate will rise B) the demand for labor will increase C) the demand for labor will decrease D) a surplus of labor exists and the real wage rate will fall