The public choice model raises questions about the government's ability to regulate economic activity efficiently. Which of the following statements represents the views of most economists with regard to the role of government?
A) U.S. citizens can afford more government regulation if the cost of this regulation is borne mostly by taxpayers with the highest incomes.
B) Government should do more to regulate markets. The public choice model has shown that rent seeking and rational ignorance affect more markets than are currently subject to regulation.
C) Agencies such as the Food and Drug Administration and the Environmental Protection Agency can serve a useful purpose, but we need to take the costs of regulation into account along with the benefits.
D) Congress should abolish the Food and Drug Administration, the Environmental Protection Agency, and other agencies and commissions because the costs of their actions exceed the benefits they provide to the public.
C
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Refer to Sales Tax. Prior to the sales tax, which of the following was false?
a. Consumer surplus was A+B+C+D+E. b. Producer surplus was F+G+H+I+J. c. Government tax revenue was zero. d. Dead-weight loss was zero.
Input choices in the present are often affected by past decisions
a. True b. False Indicate whether the statement is true or false
The drug maker Wyeth produces the hormone-therapy drug Premarin, which is derived from the urine of pregnant mares. Not even Wyeth knows exactly what chemicals are in it, and the method of making the drug is a trade secret. Barr Laboratories has been trying to make a pill that is close enough to Premarin to be approved by the U.S. Food and Drug Administration as an "equivalent" drug. This story illustrates the importance of:
A. declining long-run cost curves as a way of preserving monopoly. B. economies of scope in cementing a monopoly position. C. barriers to entry in keeping a monopoly position. D. declining demand curves as an essential ingredient in keeping monopoly.
Which of the following contributes to economic development?
What will be an ideal response?