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Discuss TWO (2) primary need of government intervention for social regulation.
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- Explain the economic case for social regulation that is based upon externalities. What is the meaning attached to market failure in this context?Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States? Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we’re trying to help without substantially reducing smoking Demand is inelastic, and smokers are mostly rich, so they don’t reduce smoking as a result of taxes Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugsa) If the only goal of a regulator of a natural monopoly firm that charges a uniform price is to ensure that the firm produces the socially optimal level of output, and the regulator has the authority to order the firm to do so, explain why this power could not be exercised when the viability of the firm is taken into account. b) Explain why a regulator, whose sole objective is to ensure that a monopoly firm produce the socially optimal output, would have no need to do anything if the firm were a perfectly discriminating monopoly. c) If the market demand curve is common knowledge for a natural monopoly firm and a regulator, but unlike the firm, the regulator has no information about the firm’s cost curves. Explain how a regulator could incentivize the firm to produce the socially optimal output, bearing in mind that the regulator does not even know which level of output is socially optimal?
- d/qui//attempt.php?attempt%3D19719928&lcmid%3D1786124 Clackamas Students Faculty English (United States) (en_us) Oh. There are positive externalities associated with smoking. 10 long-run. Smoking will decrease more in the short-run than in the O j. Smoking will decrease only slightly in the short-run. The cost of rental housing has ballooned over the past decade, and so the government is considering implementing a rent control law. The current market rate for rental housing is $1300 per month, and the government proposes a rent ceiling of $1000 per month. of Which of the following statements are false? (Select all that apply.) estion There will be a shortage of housing. Ob. The rent-control law will have no effect on the market. The law would make rental units more expensive. d. There will be an excess supply of housing. The law may result in an increase in the cost of non-rental housing. We would except to see an increase in the supply of non- rental housing units. g. The government…Why the presence of the product variety externality does imply that there is too little entry of new firms in the market?Which of the following statements best describes the EPA economic justice initiative? A.)This consists of a panel of leading economists who conduct research on climate change policy. B.)This organization has taken a more vocal position in recent years that carbon emissions must be reduced. C.)This is a form of regulation intended to reduce the negative effect of externalities. D.)This is part of the United Nations Framework Convention on Climate Change.
- You are an industry analyst who specializes in an industry where the market inverse demand is P = 200 − 4Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 12Q. a. What is the socially efficient level of output? b. Given these costs and market demand, how much output would a competitive industry produce? c. Given these costs and market demand, how much output would a monopolist produce? d. Discuss actions the government might take to induce firms in this industry to produce the socially efficient level of output.The side effect of an action that increases the well-being of others is called 8888 ah augmentation. an elasticity. a passive benefit. a positive externality.Environmental regulation was discussed for cases in which the market is unable to price risk correctly. In those cases, regulatory agencies are often tasked with evaluating risk and with administrating any regulations imposed. What does Public Choice Theory suggest might be the outcome of these bureaucratic processes in terms of the optimal level of regulation? Why?
- What characteristic of public goods makes them non-excludable in nature? a) Their use diminishes the amount available for others b) They are provided exclusively by the government c) No one can be effectively excluded from using them d) They are always free of chargeProvide a brief explanation for regulation of mobile-source pollution is neither focused exclusively onproducers or exclusively on consumers.How do the concepts of the public interest theory of regulation, political incentives, and economic theory of regulation affect the formulation of environmental regulations?