A major reason for regulating the financial sector is to facilitate __________ policy

The ability to deter entry requires

A) a credible threat that if entry occurs the firm is willing to produce more than they would otherwise. B) a credible threat that if entry occurs the firm will not produce more than they would otherwise. C) a good lawyer. D) a clever accounting department.

Maggie is trying to convince her friend Hannah to spend the morning at the beach instead of studying economics. Maggie’s argument is that the beach is free so will not cost Hannah anything to go. Maggie even volunteers to drive. Maggie’s argument

a. is correct; it is free to go to the beach. b. is forgetting Hannah’s opportunity cost of not being able to study. c. assumes Hannah has to eat at home or the beach so it will not cost Hannah additional money. d. is forgetting sunk costs.