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Chapter 5: Q 16 (page 121)

A government agency is contemplating launching an effort to expand the scope of its activities. One rationale for doing so is that another government agency might make the same effort and, if successful, receive larger budget allocations in future years. Another rationale for expanding the agency’s activities is that this will make the jobs of its workers more interesting, which may help the government agency attract better-qualified employees. Nevertheless, to broaden its legal mandate, the agency will have to convince more than half of the House of Representatives and the Senate to approve a formal proposal to expand its activities. In addition, to expand its activities, the agency must have the authority to force private companies it does not currently regulate to be officially licensed by agency personnel. Identify which aspects of this problem are similar to those faced by firms that operate in private markets and which aspects are specific to the public sector.

Short Answer

Expert verified

The aspects similar to the private sector are competition between the two companies and their authoritative nature.

The aspects that are similar to the public sector are maximum voting and skilled workers.

Step by step solution

01

Step 1. Private Sector and Public Sector

The private sector refers to that part where the private firms control the market and the public sector refers to the sector where the government controls the market.

02

Step 2. Aspects are similar to the public sector.

The aspects that are similar to the public sector are maximum voting and skilled workers. The expansion would lead to the need for more skilled and qualified workers. The agency will need the approval of half the house for expansion.

03

Step 3. Aspects are similar to the private sector.

The aspects similar to the private sector are competition between the two companies and their authoritative nature. The two government agencies competing to get expanded to get the maximum budget allocated to its fund. The expansion activity authorizes the companies to not get the private companies regulated by government personnel.

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