What are four criticisms of social regulation?
What will be an ideal response?
The criticisms of social regulation are several. First, the goals of the regulation may be uneconomical (the marginal benefits are less than the marginal costs) and often do not take into account solving the problem in the most economically efficient way. Second, the regulatory goals may be set on the basis of inadequate information. Third, there can be unintended side effects from social regulation. For example, stricter environmental laws may reduce jobs in certain industries and hurt regional economies. Fourth, the regulatory personnel have chosen to work for regulatory bodies because they feel strongly about an issue or the need for a business reform. This situation can make regulatory personnel overzealous.
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The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others
Indicate whether the statement is true or false
During the first three years of a recovery from a recession, productivity
a. usually rises relatively rapidly. b. falls slowly. c. is quite puzzling since it is usually unpredictable with respect to the directional change. d. usually remains constant.
In the 1960s and 1970s the U.S. passed several major consumer safety laws, including the Flammable Fabrics Act and the Child Protection Act. The economic impact of such legislation may include all of the following except:
a. reducing the price of the regulated product. b. increasing the cost of producing the regulated product. c. reducing the supply of the regulated product. d. reducing competition within the regulated industry.
If changes in monetary policy are going to help stabilize the economy, they must
What will be an ideal response?