Question

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What is public choice theory? Discuss the special interest effect and the myth of the rational voter. What do these concepts tell us about the tendency for inefficient trade policies to persist over time? Considering public choice theory why would uniform tariff policy be preferred to a policy with varying tariff rates? 1. I1

Answer 1

Public choice theory refers to using of economic tools to make decisive solution on issues related to role of activities of political bureaucrats in ruling the government. The theory is also closely related to Social choice theory. It reflects the individual preferences towards available resources allocated to fulfill requirements according to the needs. The Public choice theory uses the normative economic theory in which it instructs political leaders of the state how to identify the problems in the society related issues and give proper solution to overcome and achieving desired results. Such results are need to be in fruitful stage only when all politicians uses the adoptive and innovative techniques to solve the issue and also to build a great model of modern society.

The Public choice theory concepts explains the judicial and legislative power of providing solutions to the market failure. Market failure was influenced by monopoly power of all popular firms. The firms which enjoys the monopoly power reaps the profit by restricting other firms to gain same level of profits. Due to political influence few firms enjoys monopoly power. The Public choice theory emphasize to stop the monopoly power and tries to eradicate the bad evils of monopolistic competition. But as already mentioned earlier in this paragraph, Political influence and non-intervention of the government made the inefficient trade policies which acting as a pillar to encourage to corrupted firms to enjoy the monopoly power. So we can evidently say that inefficient trade policies will run over the time under the bad governance of political and all legislative powers.

For administrative and convenient transparency, uniform tariff policy was adopted by the eminent economists in the field of public choice theory. Uniform tariff was implemented on public usage facilities like main utility functional fields like electricity and water, etc. This system was introduced by public choice theory in order to detain the disadvantage situation facing by all the citizens of USA. The same unit of bill amount for using electricity and water will be charged for all the people of each state. So they avoided to levy varied tariff to avoid controversies among all people who belongs to different race and set of people. The people of Remote area of the state can also enjoy the benefits of the Uniform Tariff system.   

Answer 2

good, not bad