Why are command- and -control regulations less flexible than incentive based systems?
What will be an ideal response?
Although answers will vary, the main reason is monitoring costs and the costs involved in
punishment strategies for offenders. Incentive systems induce firms to act in their own best
interests which are less time consuming.
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A firm's demand for labor
A) increases when the price of the firm's output falls. B) decreases when the price of the firm's output falls. C) decreases when the wage rate decreases. D) always increases when the prices of other factors fall.
If an American firm opens a production facility in India, the total value of the production will be included in the
A) national income of the United States. B) gross domestic product of India. C) gross domestic product of the United States. D) national income of India.