Which of the following correctly describes the special interest theory of regulation?
a. Large numbers of poorly-organized consumers, each of whom have very little at stake in the outcome of economic regulation, capture the regulatory process and force regulated monopolies to accept negative economic profits.
b. Large numbers of poorly-organized military veterans, each of whom have very little at stake in the outcome of economic regulation, capture the regulatory process and force consumer-products firms to convert their factories to produce military goods and services.
c. Well-organized producer groups expect to profit from economic regulation and are able to persuade public officials to impose the restrictions that existing producers find attractive, such as limiting entry by new firms or competition by existing firms.
d. Well-organized producer groups incur loss from economic regulation which force them to keep prices low, while consumers enjoy a larger surplus.
c
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Which of the following statements is correct?
A. Because it is subject to change, and frequently does, consumer and business confidence has only a minimal impact on future economic activity. B. Because it has historically remained steady, consumer and business confidence has only a minimal impact on future economic activity. C. Consumer and business confidence is extremely important and can have a great impact on future economic activity. D. Consumer confidence is extremely important and can have a great impact on future economic activity. The same is not true of business confidence.
If a good is inferior, its income elasticity will be
A) 0. B) 1.0. C) negative. D) positive.
The LM curve slopes upward to the right because
A) the demand for money plus the demand for nonmoney assets must equal the supply of money plus the supply of nonmoney assets. B) a higher real interest rate is associated with a higher level of the output gap in money market equilibrium. C) a higher real interest rate is associated with a higher level of saving in goods market equilibrium. D) in equilibrium the actual real interest rate must increase one-for-one with expected real interest rate.
Trade allows a country to consume outside its production possibilities frontier
a. True b. False Indicate whether the statement is true or false