Which of the following correctly describes the special interest theory of regulation?
a. Large numbers of poorly-organized consumers, each of whom have very little at stake in the outcome of economic regulation, capture the regulatory process and force regulated monopolies to accept negative economic profits.
b. Large numbers of poorly-organized military veterans, each of whom have very little at stake in the outcome of economic regulation, capture the regulatory process and force consumer-products firms to convert their factories to produce military goods and services.
c. Well-organized producer groups expect to profit from economic regulation and are able to persuade public officials to impose the restrictions that existing producers find attractive, such as limiting entry by new firms or competition by existing firms.
d. Well-organized producer groups incur loss from economic regulation which force them to keep prices low, while consumers enjoy a larger surplus.
c
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There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y
These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is 150 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 80, PY = 130 B) PX = 40, PY = 65 C) PX = 60, PY = 120 D) PX = 30, PY = 80
Compared to the short run, the long-run market supply curve is
a. less elastic b. equally elastic c. more elastic d. always negatively sloped e. None of the answers is correct.