A major criticism of industrial regulation is that:
A. it has been applied to virtually all major U.S. corporations in the post-Second World War
period.
B. marginal cost pricing has created an underallocation of resources.
C. by allowing a fair return price, it gives natural monopolists little incentive to contain costs.
D. regulatory commissions have frequently caused natural monopolies to go bankrupt.
Answer: C
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To demonstrate the anchoring phenomenon, Kahneman and Tversky would ask research subjects very difficult questions that should be answered with a number between zero and 100
Before asking for the respondent's answer, they would also spin a large wheel that generated random number outcomes from zero to 100. If the respondents were subject to the anchoring effect, then we should expect that: A) their responses are uncorrelated with the numbers generated by the wheel. B) their responses are correlated with the numbers generated by the wheel. C) their responses are wrong most of the time. D) none of the above
More education would by itself lead to many more jobs being available
Indicate whether the statement is true or false
Microeconomics approaches the study of economics from the viewpoint of:
a. inflation, unemployment, and economic growth. b. the federal government. c. individual economic units, such as consumers, firms, and units of government. d. the economy as a whole.
The federal government could stimulate investment spending by
a. phasing out the depreciation allowance on corporate income taxes. b. enacting an investment tax credit. c. reinstating the windfall profits tax. d. reducing the tax rate on capital gains. e. Both b and d are correct.