The task of economic regulation is to:
a. protect monopoly profits.
b. approximate the results of the competitive market.
c. replace competition with government ownership.
d. ensure laissez faire.
e. increase competition within the market.
Answer: b. approximate the results of the competitive market.
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Monopolistically competitive firms, like monopoly firms, maximize their profits by charging a price that exceeds marginal cost
a. True b. False Indicate whether the statement is true or false
"Dividing the economic pie more equally may reduce the size of the economic pie." This argument is characterized as:
A. a trade off between interest rates and unemployment. B. a form of discrimination. C. a conflict between equity and efficiency. D. a conflict between full employment and economic growth.
Opportunity cost
A) can only be measured as a paid cost. B) is always the value of the next best forgone opportunity. C) does not exist since there are no receipts. D) is always the lowest valued alternative.
The new federal government's national health care program imposes the following regulations on health care insurers EXCEPT
A) health insurers must cover all who apply, including people who already have health problems. B) all new plans must cover certain preventive services such as mammograms and colonoscopies but must be paid 100% by patients. C) a ceiling is imposed on the rate of increase in health insurance prices charged to elderly people. D) insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.