What are the likely economic effects of social regulation on prices, innovation, and competition?
What will be an ideal response?
The economic consequences of social regulation largely impose increased cost on businesses. The higher costs of production lead to higher prices and less output because it can reduce labor productivity. Regulation may also reduce the rate of innovation in an economy because of the higher costs of meeting regulatory standards in bringing a product to market. There is also the potential for a heavier burden to be placed on smaller firms that have fewer financial resources to devote to regulatory compliance, resulting in less competition.
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If Jacqueline is willing to accept $1 for a cupcake and Jameson is willing to pay $3 for a cupcake, the producer surplus will ________ if the negotiated price is $1.50 as opposed to $2.00
A) increase B) decrease C) not change D) All of the above are possibilities.
If you sell a $100,000 interest-rate futures contract for 105, and the price of the Treasury securities on the expiration date is 108, your ________ is ________
A) profit; $3000 B) loss; $3000 C) profit; $8000 D) loss; $8000