John Smith is a typical citizen. Economic theory suggests that he is likely to make a more informed choice when he buys a personal computer than when he votes for a congressional candidate. This view is
a. false because the actions of legislators will exert a greater impact on Smith's welfare than will the purchase of the computer.
b. false; Smith will tend to choose more carefully when he makes public choices than when he makes private choices.
c. uncertain; it would be true if, and only if, Smith's spending on personal computers exceeds his tax bill.
d. true; since Smith can decide what computer to buy, but his individual vote is very unlikely to decide the outcome of a congressional election, he has more incentive to inform himself about the computer than the congressional election.
D
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When the labor market is in equilibrium, real GDP ________ potential GDP
A) is greater than B) is equal to C) is less than D) might be greater than, less than, or equal to E) is not comparable to
A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is
A) false since it ignores the workers who lose their jobs as result of international trade. B) true because all consumers and workers benefit from international trade. C) false since not all countries participate in international trade. D) true because it refers to countries; individuals may be losers as a result of international trade.