Final answer:
The authority that the public believes the agent has based on the agent's actions is known as apparent authority or ostensible authority. It relies on the perception that the agent's actions are within the scope of authority granted by the principal and is also tied to the concept of rational-legal legitimacy in democratic systems.
Step-by-step explanation:
The authority that the public believes an agent has based on the agent's actions is often referred to as apparent authority or ostensible authority. This is a concept in law where a principal is liable for the acts of the agent, and these acts are within the scope of the authority the public reasonably believes the agent has, based on the principal's behavior or communication.
An example of this is when a citizen interacts with a police officer and complies with requests during a traffic stop because they recognize the legitimate authority of the officer. Similarly, within a business context, an employee may have certain authority conferred by their employer that external parties can rely on due to the employee's role or actions which signify certain powers.
Understanding the limits of this authority is critical since it is generally confined to specific circumstances and jurisdictions. For example, while a government can require you to pay taxes, it cannot impose obligations that are unlawful. In modern democracies, authority is also bound by the notion of rational-legal legitimacy, where acceptance of power comes from the institutional framework rather than individuals, underscoring the importance of compliance with legal structures and policies.