Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 25, Problem 8QP
To determine
Determine the major difference between capture theory of regulation and public theory of regulation.
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Which of the following is the correct name for the idea that certain firms prefer government regulation because regulation shields them from the pressures of competition and, in effect, guarantees them a regulated profit. a. The public interest theory of regulation. b. The structuralists’ theory of monopoly. c. The legal cartel theory of regulation. d. The public regulation theory of natural monopoly
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Economics (MindTap Course List)
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- Which of the following is not one of the three basic situations in which regulation is imposed? a. externalities b. natural monopoly c. price fixing d. imperfect informationarrow_forwardWhat are the benefits of research in improvement of enforcement and regulation laws?arrow_forwardTo what extent would you consider the setting up of regulatory bodies an appropriate and effective solution to the principal-agent problem in markets where there is a natural monopoly?arrow_forward
- Q2. Why is it important for companies to implement good internal control? What are the principles of internal control? Explain your answer.arrow_forwardGiven what you know about regulatory capture, can you describe a possible scenario where accusations of restrictive practices ends up limiting competition, rather than extending it?arrow_forwardGive typing answer with explanation and conclusion Which theory is most valid and why? capture theory of regulation or public choice theory of regulation?arrow_forward
- Which theory of regulation explains why the massive fraud of Bernie Madoff went undetected for years?arrow_forwardName and explain in detail two mechanisms through which the market for corporate control operates.arrow_forwardGive only typing answer with explanation and conclusion Based on the recent bank failures; do you feel there is enough regulation? If yes, why? If no, why not? Please provide at least one example.arrow_forward
- Definition of Economic Theory of Government Regulationarrow_forward) Explain and critically analyse the Stigler-Pelzman model of regulation, commenting on the efficiency of the model’s equilibrium.arrow_forwardContrast the public interest and interest group theories of regulation with respect to a. The role of the regulatory body b. Their implications for the amount of the regulated commodity or service (here, information) to be supplied.arrow_forward
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