The social interest theory of regulation suggests that the political process and regulations will ________ and the capture theory of regulation suggests that the political process and regulations will ________
A) seek to minimize deadweight loss; serve the interests of the producers
B) try to maximize the producers' economic profits; seek to minimize deadweight loss
C) be unaffected by deadweight loss; increase the firms economic profits
D) ignore producers' interests and concentrate on consumers' interests; seek to minimize firms' economic profits
A
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Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts
A) the horizontal intercept rightward and the vertical intercept upward. B) the horizontal intercept rightward but does not shift the vertical intercept. C) the vertical intercept upward but does not shift the horizontal intercept. D) neither the horizontal intercept nor the vertical intercept.
A leftward shift of the demand curve results in: a. increase in equilibrium price
b. increase in quantity. c. decrease in both equilibrium price and quantity. d. decrease in quantity and an indeterminate equilibrium price.