POL 106 Study Guide - Quiz Guide: Tenth Amendment To The United States Constitution, Transaction Cost, Democratic Republic
30 Apr 2016
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The process through which individuals and group reach agreement on common or collective action. Collective action refers to action taken together by a group of people whose goal is to enhance their status and achieve a common objective. An economic problem in which every individual tries to reap the greatest benefit from a given resource. As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. As groups size increase, incentives to contribute decreases / ex. it is argued that those who do not have health insurance are a burden to tax payers. Transaction cost: resources required to make collective decisions. Conformity cost: difference between preference of the party and the collective; refers to the difference between what a person ideally would prefer and what the group with which that person makes collective decisions actually does. Compare and contrast public and private goods public goods:
