The hypothesis that regulators eventually are controlled by the regulated firms and their special interests is the
A) share-the-gains, share-the-pains hypothesis.
B) capture hypothesis.
C) public interest theory.
D) control-group hypothesis.
Answer: B
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Even if two products have different characteristics, such as color, the products are only considered heterogeneous if consumers
A) consider the two products as perfect complements. B) consider the two products as perfect substitutes. C) consider the two products as imperfect substitutes. D) consider the two products as imperfect complements.
In which of the following situations is the political process likely to result in the inefficient and wasteful use of resources?
a. when the benefits are concentrated and the costs are concentrated b. when the benefits are concentrated and the costs widespread c. when the benefits are widespread and the costs are concentrated d. when the benefits are widespread and the costs are widespread