The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the
A) social interest theory of regulation.
B) capture theory of regulation.
C) Coase theory of regulation.
D) socially optimal theory of regulation.
E) predatory theory of regulation.
A
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In the figure above, a factor that could cause the demand for bonds to shift to the right is
A) an increase in the riskiness of bonds relative to other assets. B) an increase in the expected rate of inflation. C) expectations of lower interest rates in the future. D) a decrease in wealth.
Recent research estimates that the short-run price elasticity of demand for gasoline in the U.S. is -0.3, and the long-run price elasticity of demand is -1.4. What happens if the govenment increases the federal gasoline tax?
A) Consumer expenditures on gasoline increase over the short run and long run B) Consumer expenditures on gasoline decline over the short run and increase over the long run C) Consumer expenditures on gasoline increase over the short run and decline over the long run D) Consumer expenditures on gasoline decrease over the short run and long run
A tax levied on purchases of a particular good or service
A) is illegal because it is discriminatory. B) always leads to a reduction in total tax revenues. C) always leads to an increase in total tax revenues. D) is an excise tax.
As quantity increases, which of the following must be true if average total costs are rising? a. Marginal cost must be greater than average total cost
b. Marginal cost must be less than average total cost. c. Average fixed cost must be increasing. d. Average fixed cost must be less than average variable cost.