The public choice model raises questions about the government's ability to regulate economic activity efficiently.Which of the following statements represents the views of most economists with regard to the role of government?
A)Congress should abolish the Food and Drug Administration, the Environmental Protection Agency, and other agencies and commissions because the costs of their actions exceed the benefits they provide to the public.
B)Government should do more to regulate markets. The public choice model has shown that rent seeking and rational ignorance affect more markets than are currently subject to regulation.
C)U.S. citizens can afford more government regulation if the cost of this regulation is borne mostly by taxpayers with the highest incomes.
D)Agencies such as the Food and Drug Administration and the Environmental Protection Agency can serve a useful purpose, but we need to take the costs of regulation into account along with the benefits.

Question

Quizplus · Accepted Answer

Most economists believe that government agencies can serve important functions, but that the costs of regulation must be weighed against the benefits. The public choice model shows that rent seeking and rational ignorance can make regulation less efficient, but this does not mean that regulation is always bad. Rather, it suggests that policymakers need to be mindful of the costs and benefits of regulatory decisions. Option A is too extreme and not supported by most economists, while option B assumes that government regulation is always desirable, which is also not a widely held view. Option C is based on a flawed assumption that only high-income taxpayers bear the cost of government regulation.

The Public Choice Model Raises Questions About the Government's Ability