Economic theory assumes elected and appointed government officials
A) place their personal or private welfare ahead of the public interest.
B) place the public interest ahead of any personal or private interests of their own.
C) are free to pursue the public interest because they aren't constrained by competition.
D) respond to the anticipated costs and benefits to themselves of decisions contemplated.
D
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Suppose that world demand shifts away from agricultural goods toward hightech manufactured goods. If land is specific to agriculture, capital is specific to manufacturing, and labor is mobile between sectors, which of the following is TRUE?
a. The percentage change in capital income is less than the percentage change in labor income. b. The percentage change in labor income is greater than the percentage change in the relative price of manufacturing goods. c. The percentage change in capital income is greater than zero. d. The percentage change in labor income is more than the percentage change in the relative price of manufacturing goods.
Consider a situation in which a factory emits high levels of air pollution and the factory is not liable for the damages its pollution causes. According to the Coase theorem, government action is ________ to achieve an ________ amount of pollution
A) necessary; equitable B) not necessary; equitable C) necessary; efficient D) not necessary; efficient.