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Here is a list of possible explanations for government programs and policies. In each case, identify whether the explanation reflects the public interest theory or the public choice theory of government action.
1. It is possible to explain much government activity by investigating the publics demand for government services, but one should not ignore the incentives for increased supply of government services.
2. Through careful application of cost-benefit analysis, we can identify the amount of a public good that should be provided by the government.
3. The determination of what are merit or demerit goods is inherently political rather than scientific and more often than not can be traced to the efforts of groups with an ax to grind or some private motive to pursue.
4. While it is possible that policy makers follow some well-reasoned-out application of ability-to-pay or benefit-received principles, it is more credible to recognize that many of the taxes in this country reflect the fact that groups find it in their interest to organize to get tax burdens shifted to others.
5. It is in the public interest to correct the market failure caused by monopoly firms. Therefore, it behooves us to do so.
Solution: 1. Public choice theory of government action perspective 2. Public interest perspective 3. Public choice theory of government action…

rspective 4. Public choice theory of government action perspective 5. Public interest perspective

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