The loss of utility associated with an inferior mix of output because of poorly designed regulations is known as regulation costs.
Answer the following statement true (T) or false (F)
False
If bad decisions, incomplete information, or faulty implementation actually worsen the mix of output, the loss of utility imposes costs on society over and above administrative and compliance costs. This is an efficiency cost.
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When the ____________establishes new regulations, the cost of production can be affected.
Fill in the blank(s) with the appropriate word(s).
When aggregate planned expenditure exceeds real GDP,
a. firms increase production and real GDP increases. b. firms decrease production and real GDP increases. c. firms decrease production and real GDP decreases. d. firms increase production and real GDP decreases. e. firms do nothing because induced expenditure will increase so that the equilibrium is reached.