Regulatory capture often occurs because of which of the following?
A. Government officials want stronger control over industry regulation.
B. Nearly everyone with expertise works in the regulated industry.
C. Patent law allows firms to gain monopoly power easily and therefore control a market.
D. Consumer groups are effective at lobbying the government for industry regulation.
Answer: B
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As the price of a product rises, the quantity supplied decreases
Indicate whether the statement is true or false
With only two goods, if the income effect is in the same direction as the substitution effect then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
The World Trade Organization
A) was set up to increase tariffs among nations. B) was set up to negotiate exchange rates between countries. C) was set up to decrease tariffs among nations. D) handles trade disputes among its member nations.
Related to the Economics in Practice on page 79: If a hurricane results in the supply of hotel rooms decreasing and the equilibrium price for hotel rooms increases, the demand for hotel rooms ________ and total revenue from the sale of hotel rooms ________.
A. may have increased, decreased, or stayed the same; may increase, decrease, or stay the same B. may have increased, decreased, or stayed the same; will decrease C. has decreased; may increase, decrease, or stay the same D. has decreased; will decrease