Regulation is guaranteed to be more efficient than a monopoly
A) True, the government is able to internalize the dead weight loss of the monopoly.
B) True, the consumers are better off if government provides the product rather than a private firm.
C) False, the government does not always have sufficient information to provide a more efficient market outcome.
D) False, the consumers are worse off under government regulation.
C
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A lower interest rate
A) lowers the marginal propensity to consume out of permanent income. B) raises the marginal propensity to consume out of permanent income. C) lowers the proportion of actual income considered to be permanent income. D) raises the proportion of actual income considered to be permanent income.
Monopolistic competition and perfect competition are similar in that each market structure is characterized by
A) advertising. B) production at minimum average cost in the long run. C) a horizontal demand curve. D) the absence of long-run economic profits.
One disadvantage of government subsidies over price controls is that subsidies
a. prevent the attainment of equilibrium in the markets in which they are imposed. b. make higher taxes necessary. c. are always unfair to those with low incomes. d. cause unemployment.
In the presence of a positive externality, public policy aims to increase quantity beyond the private optimum
Indicate whether the statement is true or false