What is the main difference between economic regulation and social regulation?
What will be an ideal response?
Economic regulation involves only particular industries, including policies aiming at controlling prices or influencing the characteristics of specific products. In contrast, social regulation applies to all firms in the economy and aims at improving the quality of life by, for example, regulating product safety, advertising and environmental effects.
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West Coast Gas, Inc, is a natural gas supplier. The firm faces the demand schedule shown in the table above and cannot price discriminate
The company's fixed cost is $1,000 per month and its marginal cost is constant at $10 per thousand of cubic feet. The government imposes a marginal cost pricing rule on the company. a) What is the price of natural gas supplied by West Coast Gas? How many cubic feet does the company sell? What is the firm's economic profit per month? b) How does the regulation affect total surplus? c) Is the regulation in the social interest? Explain.
Refer to Figure 3-6. The figure above represents the market for coffee grinders. Compare the conditions in the market when the price is $15 and when the price is $21. Which of the following describes how the market differs at these prices?
A) At each price there is a shortage; the shortage is greater at $15 than at $21. B) At each price there is a shortage; firms will raise the equilibrium price in order to eliminate the shortage. C) The difference between quantity supplied and quantity demanded is greater at $21 than at $15. D) At each price the demand for coffee grinders exceeds the supply of coffee grinders.
Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded in the market would be
A) 51 lbs. B) 63 lbs. C) 76 lbs D) 146 lbs.
The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each. What is the opportunity cost of buying a cappuccino?
A) $1.00 B) $2.50 C) 2/5 of a Russian tea cake D) 2 1/2 Russian tea cakes