The equilibrium level of regulation is where the marginal political benefits to the special interests are equal to the marginal political costs of the foregone regulation

Assuming all else equal, if households are optimistic about their future income, it is likely to cause a(n):

A) downward movement along their credit demand curve. B) upward movement along their credit demand curve. C) leftward shift of their credit demand curve. D) rightward shift of their credit demand curve.

When using pollution charges to improve efficiency in a market with an external cost, regulators attempt to set the pollution charge equal to the

A) marginal social cost of production. B) marginal external cost of production. C) marginal private cost of production. D) marginal private benefit of consumption. E) marginal external benefit minus the marginal external cost.