EBK ECON MICRO
6th Edition
ISBN: 9781337671828
Author: MCEACHERN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 15, Problem 1P
To determine
The various types of government regulations of business.
Concept Introduction:
Government Regulation refers to a law that controls the way that a business can operate. Government Regulations are necessary for the proper functioning of societies and economies. These regulations help in protecting the rights and safety of citizens, justifying markets, and ensuring the delivery of public goods and services.
Expert Solution & Answer
Explanation of Solution
There are three types of Government Regulations:
- Social Regulation: Social regulation aims at protecting the interests of public from economic activity, such as control over unsafe working conditions, etc.
- Economic Regulation: Economic regulation is a form of government intervention. It is designed to influence the behavior of individuals and firms in the private sector. These regulations adjust conditions and prices in the economy, quality of industries providing services and the entry of new firms in a situation where
monopoly appears desirable.
- Antitrust Policy: Antitrust policy aims to make companies act in a competitive manner. Antitrust policy do so by breaking up companies that are monopolies, finding companies that collude to establish higher prices, and prohibiting mergers that would increase market power. This policy is based on efficiency.
Economic regulation and Antitrust Policy are discussed at length in this chapter. Both the regulations are equally necessary to protect consumer welfare in the economy.
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1800 tons of pomegranates a year is a lot of sweetness!
So, you can get 71 Afghanis for $1? How cool. Does that mean you can buy a lot of stuff in Afghanistan for only $1? How do you know that your purchasing power in Afghanistan is stronger than in the United States?
Yes, with an exchange rate of 71 Afghan Afghani for 1 US dollar, you can buy many things in Afghanistan for just $1. However, purchasing power isn't solely determined by the exchange rate. It also depends on the cost of goods and services in each country. For example, if a meal in Afghanistan costs 200 Afghanis, you would need about $2.82 to buy that meal in US dollars (since 200 Afghanis divided by 71 Afghanis per dollar equals approximately $2.82). So, while the exchange rate allows you to get more Afghanis for your dollars, you also need to consider how much things cost in Afghanistan.
Now that the world seems to like Afghani stuff and is buying more of it, does that mean your…
The idea that a country can experience gains from trade means that it can
A) consume at a point outside its production possibilities frontier.
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Chapter 15 Solutions
EBK ECON MICRO
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