Economizing behavior. When applied to a community, it implies that (a) an
activity should be undertaken if the sum of the benefits to the individuals exceeds the sum of their costs
and (b) no activity should be undertaken if the costs borne by
the individuals exceed the benefits.
The side effects of an action that influence the well-being of nonconsenting parties. The nonconsenting
parties may be either helped (by external benefits) or harmed
(by external costs).
Any good (or policy) supplied by the political process.
The study of decision-making as it affects the formation and operation of
collective organizations, such as governments. The discipline
bridges the gap between economics and political science. In
general, the principles and methodology of economics are applied
to political science topics.
Jointly consumed goods. When consumed by one person, they are also made
available to others. National defense, poetry, and scientific
theories are all public goods.
Voter ignorance that is present because people perceive their individual
votes as unlikely to be decisive. Voters rationally have little
incentive to inform themselves so as to cast an informed vote.
The increase in wealth emanating from an increase in the purchasing power
of a constant money supply as the price level declines. This
wealth effect leads to a negative relationship between price
(level) and quantity demanded in the goods and services market.
Actions by individuals and interest groups designed to
restructure public policy in a manner that will either
directly or indirectly redistribute more income to themselves.
Misallocation of resources that results because public-sector action is
biased (a) in favor of proposals yielding clearly defined
current benefits in exchange for difficult-to-identify future
costs and (b) against proposals with clearly identifiable
current costs yielding less concrete and less obvious future
benefits
An issue that generates substantial individual benefits to a small minority while imposing a small
individual cost on many other voters. In total, the net cost to
the majority might either exceed or fall short of the net
benefits to the special interest group.
