The justification for occupational licensing laws is that they protect the public from incompetent practitioners (for example, lawyers and medical doctors), but the laws also result in
A) higher prices and restrictions on the number of people who can enter the professions affected by the laws.
B) economies of scale.
C) ownership of a key input.
D) an increase in the amount of output required to achieve minimum efficient scale.
Answer: A
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A favorable supply shock would
A) shift the production function up and decrease marginal products at every level of employment. B) shift the production function down and decrease marginal products at every level of employment. C) shift the production function down and increase marginal products at every level of employment. D) shift the production function up and increase marginal products at every level of employment.
The law of demand refers to the:
a. inverse relationship between the price of a good and the willingness of consumers to buy it. b. price increase that results from an increase in demand for a good of limited supply. c. inverse relationship between the price of a good and the quantity offered for sale. d. increase in the quantity of a good available when its price increases.
If a monopolist calculates its marginal revenue to be $15 and marginal cost to be $16, then the monopolist should:
A. lower its price. B. decrease its output. C. increase its output. D. leave its output and price unchanged.
Adam Smith's theory of the invisible hand posits that the most efficient allocation of resources is often achieved by:
A. collective action. B. reducing economic inequality. C. government intervention in the market. D. the actions of independent, self-interested buyers and sellers.