A theory of regulatory behavior, which states that regulators must take into account the preferences of legislators, producers, and consumers, is the
A. general interests theory.
B. public interest theory.
C. share-the-gains, share-the-pains theory.
D. capture theory.
Answer: C
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According to the permanent-income hypothesis, a permanent increase in a person's income will
A) increase consumption more than savings. B) increase savings more than consumption. C) be smoothed out to where the increases in consumption and savings are roughly equal. D) have the same effect on consumption as a transitory increase in income.
Studies have shown that children born into poverty do not suffer from lasting health problems
Indicate whether the statement is true or false
Suppose a consumer's expected utility function given two possible states of nature A and B can be expressed in terms of consumption of food, F, in both states as U(FA, FB) = [0.6 × ln(FA)] + [0.4 × ln(FB)]. For this utility function, MUA is (0.6/FA) and MUB is (0.4/FB). Without insurance, the consumer can consume 200 in state A but only 50 in state B. The consumer can purchase insurance at a premium of 50 cents per dollar of benefit. Which of the following gives her budget line?
A. FA = 250 - FB B. FB = 250 - FA C. FA = 200 - FB D. FB = 50 - FA
A fall in prices of imported resources will cause aggregate:
a. Demand to increase b. Demand to decrease c. Supply to decrease d. Supply to increase