1. 14.3 Economics of Public Choice
CONTEMPORARY ECONOMICS
12/5/2018
14.3 Economics of Public Choice
Objectives
Discuss how representative democracy may favor special interests at the expense of the public interest.
Distinguish between bureaus and firms, and explain why bureaus might be less responsive to customers than firms are.
LESSON 14.3

2. 14.3 Economics of Public Choice
Key Terms
maximizing political support
rational ignorance
bureaus

3. Representative Democracy
14.3 Economics of Public Choice
Representative Democracy
Maximizing political support—the objective assumed to guide the behavior of elected officials; comparable to profit maximization by firms and utility maximization by households
Role of special interest
Rational ignorance—A stance adopted by voters when they find that the cost of understanding and voting on a particular issue exceeds the benefit expected from doing so

4. 14.3 Economics of Public Choice
Bureaus
Bureaus are government departments and agencies charged with implementing legislation and financed through legislative bodies

5. Bureaus Versus Firms Voluntary exchange versus coercion Product prices
14.3 Economics of Public Choice
Bureaus Versus Firms
Voluntary exchange versus coercion
Product prices
Customer feedback
Voter incentives
Private versus public production