What costs associated with the new miles-per-gallon requirements arise from decisions made in self-interest and in the social interest?
What will be an ideal response?
Automobile producers and buyers make their decisions in pursuit of their self-interest, but boosting gas mileage requires more costly engines, which in turn means the cost of producing automobiles and their prices will rise. President Obama's decision to impose the new regulations is intended to serve the social interest, so all the costs associated with the new miles-per-gallon regulation arise from this decision made in the social interest.
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In evaluating the degree of economic efficiency in a market, we can state that the size of the deadweight loss in a market will be smaller
A) the greater the difference between marginal cost and average revenue. B) the smaller the difference between marginal cost and price. C) the greater the difference between marginal cost and price. D) the smaller the difference between marginal cost and average total cost.
The new $20 bills are being introduced by the U.S. Treasury primarily to diminish
a. inflation. b. poverty. c. counterfeiting. d. bank failures.