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.
a. reducing the price of the regulated product.
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If a market is controlled by one perfect price discriminator who is able to charge each consumer the highest price that consumer is willing to pay, the seller will produce output until the price paid by the last consumer is equal to the marginal cost of making the good. That is, the price of the last good equals the marginal cost of making the good. If welfare is measured as consumer surplus plus
producer surplus, compare this market structure to a competitive market in terms of efficiency and equity. What will be an ideal response?
The fractional reserve system of banking evolved because
a. goldsmiths did not have safes large enough to hold all their gold deposits. b. there was always a dire need for additional money. c. goldsmiths knew that on any given day, only a few depositors would come to claim their deposits. d. goldsmiths knew that they would not be prosecuted for lending out money they did not have.