Q19Governments continue to provide public support to some farmers, even in the absence of market failures. Choose the best explanation for this practice according to public choice theory.a.All consumers are willing to pay higher prices to provide financial support to some farmers.b.The marginal social cost of providing support is equal to the marginal social benefit.c.Vote-maximising governments are irrational in their response to powerful lobbying.d.Government support goes to consumers in the form of price controls, which balances the support given to farmers.e.The benefits of the support are concentrated among a small and vocal group of farmers and the costs are widely dispersed among millions of consumers.Clear my choice

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Answered: Governments continue to provide public…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 3PA

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Q19

Governments continue to provide public support to some farmers, even in the absence of market failures. Choose the best explanation for this practice according to public choice theory.

All consumers are willing to pay higher prices to provide financial support to some farmers.

The marginal social cost of providing support is equal to the marginal social benefit.

Vote-maximising governments are irrational in their response to powerful lobbying.

Government support goes to consumers in the form of price controls, which balances the support given to farmers.

The benefits of the support are concentrated among a small and vocal group of farmers and the costs are widely dispersed among millions of consumers.

Clear my choice

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