Overall, economists believe that deregulation of industries formerly subjected to industrial regulation:
A. has been a clear failure.
B. is neutral in its impact to society's well-being, creating minimal net benefits at best.
C. has produced large net benefits for consumers and society.
D. has produced sizable efficiency gains in the communications industry, but not in the
transportation industry (railways, trucking, airlines).
Answer: C
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A higher price level causes us to
A) move up along an aggregate demand curve. B) move down along an aggregate demand curve. C) shift the aggregate demand curve to the right. D) shift the aggregate demand curve to the left.
A potential problem arises in principal-agent relationships
a. because the agents' actions are not always observed by the principals b. because the principals' actions are not always observed by the agents c. because the agent's and the principals' actions are always observed by each other d. the observability of actions is irrelevant
If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good
a. True b. False Indicate whether the statement is true or false
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.