ECON 102 Lesson 13

A law is more likely to pass if it has _____ cost and ______ benefits.

diffuse; concentrated

The theory of the government assumes that people in government are trying to fulfill the wishes of the citizens is called…

Public Interest Theory of Government

Four Types of Acquired Regulation

1. Direct Subsidy

2. Control of entry of new rivals

3. Policies that harm substitutes and help complements

4. Price fixing

Rational Ignorance

cost of educating exceeds the potential benefit of the knowledge

A license to join a profession would be an example of what type of acquired regulation?

barrier to entry

Economic Theory of Government
A theory of legislative and regulatory outcomes that assumes _____ markets are no different from ______ markets in that organized groups seek to further their _______.

political;economic;self-interest

Public Choice- Using economic theories to determine the _____of people in government and using those _______ to predict what _____ are created.

incentives; incentives; policies

Concentrated Benefits- When the benefit of a policy is spread over a small population, the per-person benefits of the policy are relatively high, so that small population will organize to lobby__ ___ of the policy.

in-favor

Diffuse Costs- When the burden of a tax or program is spread over a __________ so that the per-person costs of opposing such a cost _____ the per-person benefit.

large population; exceed