One undesirable effect of social regulation is that it
A. destroys incentives for firms to engage in marginal cost pricing.
B. raises prices of goods to consumers, while lowering prices to business and special interest groups.
C. reduces the effectiveness of economic regulation.
D. affects smaller firms disproportionately, creating anticompetitive effects.
Answer: D
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The fraction of additional income spent on imports is called the
A) marginal propensity to export. B) import function. C) marginal propensity to import. D) trade balance.
The Federal Trade Commission Act:
A. prohibited selling products at "unreasonably low prices" with the intent of reducing competition. B. was passed to establish a body to enforce antitrust laws. C. outlawed stock purchases that would substantially reduce competition. D. made it illegal to monopolize a market.