Politicians who publicly oppose a tax increase that they privately favor best illustrate that:

• A. tax increases are always unpopular among all groups
• B. public opinion always determines political decisions
• C. individuals may act in their own self-interest rather than reveal their true preferences
• D. politicians are required by law to oppose tax increases

Answer: (C)

Verified step by step guidance

1. Identify the key concept illustrated by the behavior of politicians who publicly oppose a tax increase they privately favor. This involves understanding the difference between public statements and private preferences.
2. Recall the concept of 'revealed preferences' versus 'stated preferences' in microeconomics, where individuals may not always reveal their true preferences due to strategic reasons or social pressures.
3. Consider the role of self-interest in decision-making, especially in political contexts where politicians may want to maintain public support while pursuing their own goals.
4. Analyze why politicians might publicly oppose a tax increase even if they privately support it, focusing on the incentives to align public statements with voter preferences rather than personal beliefs.
5. Conclude that this behavior best illustrates that individuals (including politicians) may act in their own self-interest rather than reveal their true preferences, which is a common theme in microeconomic analysis of strategic behavior.