What do critics of social regulation need to remember about government?
What will be an ideal response?
The major point to remember is that less government is not always better government. Social regulation if applied carefully has the potential to improve economic efficiency and overall societal welfare. Such regulation can reduce the hard edges of a market economy by making the workplace safer, drugs safer, eliminating discriminatory work practices, and other action. This regulation can help maintain political support for a market economy without undermining the benefits of competition.
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Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?
A) Both equilibrium price and quantity increase. B) Equilibrium price increases. C) Equilibrium price decreases. D) Equilibrium quantity increases. E) Equilibrium quantity decreases.
Refer to above figure. Imagine that the relative capital abundance of Australia was so much greater than that of Sri-Lanka, that we would have to locate Australia far to the right on the K/L axis
If this were so far to the right that there was no area of overlap on the w/r axis, then what product would Australia export? Which product will each of the trade partners export? Will the relative wages as calculated now be the same or different in both Australia and Sri Lanka?