FINAL PUBLIC CHOICE

"What is the central idea behind Public Choice theory regarding policy outcomes?

Policy outcomes often reflect the interests of the politically powerful rather than economically efficient solutions."

"Why are tariffs considered a 'bad idea' from an economic perspective?

Tariffs raise costs for domestic consumers and producers"

"What is 'unilateral free trade' and why is it advocated?

Unilateral free trade involves a country eliminating tariffs regardless of other countries' actions. It's advocated because voluntary trade is seen as moral and leads to just outcomes."

"Why is it inaccurate to describe trade imbalances as issues between 'countries'?

Only individuals trade"

"How does Hayek view the concept of 'social justice'?

Hayek views 'social justice' as problematic because it often requires treating people unequally to achieve equal outcomes"

"What is the difference between equality of outcome and equality of treatment?

Equality of outcome aims for similar results for everyone"

"What are some potential unintended consequences of pursuing 'social justice'?

Reduced freedom"

"Explain the concepts of negative and positive freedom.

Negative freedom is freedom from external constraints"

"What is the principle of subsidiarity?

The principle that problems should be solved at the lowest possible level of organization or governance."

"What is the difference between solidarity as a choice and solidarity imposed by legislation?

Solidarity as a choice is voluntary cooperation"

"What is 'spontaneous order'?

Order that arises from human action but not from human design"

"Why is the 'voice of the majority' not necessarily proof of justice?

Because democracy can be manipulated and used to justify oppression if not constrained by the rule of law and protection of individual rights."

"What is the key difference between political power and economic power?

Political power relies on threat"

How has the purpose of taxation shifted over time

" according to the text?

"Explain Keynes' 'paradox of thrift'.

If everyone tries to save more during a recession"

"Why is democracy considered dangerous when used to justify political power?

Because it can be used to suppress liberty and rights"

What is more important than the right to vote

" according to the text?

Why is diplomacy unlikely to lead to peace or stable relations

" according to the text?

"What is the 'principal-agent problem' in the context of diplomacy?

Diplomats may act based on personal ideology or partisan commitments rather than the interests of the country they represent."

"What is 'rational ignorance' and how does it relate to public choice?

Rational ignorance is the decision to remain uninformed because the cost of acquiring information outweighs the potential benefit"

"Why are private contracts generally more enforceable than international treaties?

Private contracts have a clear legal system and aligned incentives"

What is the primary purpose of governments according to the text?

"What is 'Lingle's Law'?

A cause-and-effect cycle where government intervention leads to more intervention"

"How can public choice inform law and economics?

By explaining the political processes that create legislation."

"How can law and economics inform public choice?

By analyzing the legal frameworks of political behavior."

"What are the essential ingredients of populism?

Redistribution of political power and income/wealth"

"What are the potential economic consequences of populism?

Increased burdens on the private sector and efficiency losses due to increased resource use by the public sector."

"What is the populist's typical strategy for dealing with failure?

Blaming outsiders or global turmoil for their own failures."

"What are public goods?

Goods that are non-excludable and non-rivalrous"

"What is the 'free-rider problem' and how does it relate to public goods?

Since people can benefit from public goods without paying"

"What is the Pareto argument for government provision of public goods?

If government forces everyone to pay for a public good and everyone benefits"

"What is the role of NGOs in providing public goods?

NGOs may substitute for government provision of public goods."

"What are externalities?

Externalities are costs or benefits that affect parties who did not agree to the action causing the cost or benefit."

"How can private property rights help resolve externalities?

Clear property rights allow private businesses to resolve externalities through bargaining and negotiation."