The theory that regulation helps producers to maximize profit is the
A) social interest theory.
B) consumer surplus theory.
C) antitrust theory.
D) capture theory.
E) oligopoly theory of regulatory bodies.
D
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Assume that labor and capital are complements in production and that the wage declines. Which of the following statements best describes the adjustment in the use of labor?
A) Adjustments in labor use are not influenced by adjustments in capital use. B) The MRPL curve shifts downward in this case. C) More labor is used both because of the reduced wage and increased use of capital. D) Changes in labor use are indeterminate because the reduced wage and reduced use of capital have opposite influences on the use of labor.
An individual is induced to change his/her occupation if:
a. the sunk cost of the current occupation is high. b. the expected net gains from the alternative occupation is negative. c. the outlook for future income, in the current occupation, increases. d. he/she has devoted a lot of money, time and effort in the current occupation. e. the marginal cost of remaining in the current occupation is very high.