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Occurs whenever the government intervenes in the market mechanism.
Occurs whenever the government pursues laissez-faire policies
Occurs whenever an imperfection in the market mechanism prevents optimal outcomes.
Control the structure of an industry only
Alter industry behavior only.
Prevent monopolies from forming.
Control the structure of an industry and alter industry behavior
Local telephone companies.
Consumers would lose because of less competition.
Producers would be better off because they would have greater market share.
Society would be worse off because the economies of scale would be destroyed.
Workers would be worse off because fewer jobs would be available.
Cost of production should fall as the smaller firms become more efficient.
Price charged by the competitive firms should decrease as the firms become more efficient.
Price charged by the competitive firms should increase because the firms will be less efficient.
. Total production for the industry should increase because of the efficiency generated by increased competition.
Average total costs increase
Allocative efficiency is achieved
Economic profits are reduced
Lose money and go out of business.
Earn only normal profits.
Earn economic profits.
Earn less of a profit than before, but still earn a profit.
Taxpayers dislike this use of their tax dollars.
Private companies are less efficient than public companies.
The companies have no incentive to limit costs.
The companies will allow product quality to decline.
That perfectly competitive firms would choose.
Where MR = MC.
Greater than its profit-maximizing choice.
Where MR equals zero.
Technical efficiency is achieved.
The net effect of government intervention on society is definitely beneficial.
Government intervention still may not be justified if the economic costs are too high.
Allocative efficiency is achieved.
Dealing with a natural monopoly.
There is market power.
Government intervention fails to improve economic outcomes.
Public goods are present.
An administrative cost of regulation.
An efficiency cost of regulation.
A compliance cost of regulation.
An equity cost of regulation.
Compliance costs of regulation.
Administrative costs of regulation.
Budgetary costs of regulation.
Efficiency costs of regulation.
Marginal benefit of regulation exceeds its marginal cost.
Economic cost of regulation exceeds the value of the improvements in government intervention.
Value of government failure exceeds the value of market failure.
Intervention improves market outcomes, regardless of costs.
Perfect markets and perfect government intervention.
Perfect markets and imperfect government intervention.
Imperfect markets and perfect government intervention.
Imperfect markets and imperfect government intervention.
Shift toward the origin
Upward sloping to the right
Downward sloping to the right
Increasing opportunity cost of labor.
Increasing marginal utility of income.
Decreasing value of leisure time forgone.
Constant marginal utility of income.
Encourages people to consume less leisure.
Will shift the labor supply curve rightward.
Will lead to a movement up along the existing supply curve.
Encourages people to work less hours.
Law of diminishing marginal utility.
Law of diminishing marginal leisure.
Market Wage Rate.
Income & Wealth.
Prices of Consumer Goods
The demand for labor.
The prices of consumer goods.
Income and wealth.
Expectations for income or consumption.
Have become relatively more scarce than before the recession.
Are no longer offered for sale in factor markets.
Are derived from the demand for final output, which also declines in a recession.
Have become more expensive than before the recession.
Derived demand for computer science majors is less than the derived demand for philosophy majors.
Marginal revenue product for computer science majors is less than the marginal revenue product for philosophy majors.
The search for the meaning of life is a growth industry.
Information technology is a growth industry.
Employment can be increased only by offering a higher wage rate.
No further increases in output can be achieved by using additional units of labor.
MRP is at maximum.
Additional units of labor must be employed because other factors of production are being wasted.
The marginal physical product multiplied by the marginal revenue of the output.
The change in the quantity of labor divided by the change in total revenue.
The change in total output divided by the change in the quantity of labor.
The percentage change in total revenue divided by the percentage change in the quantity of labor.
Each worker has an increasingly smaller amount of other factors with which to work.
Each worker has an increasingly larger amount of other factors with which to work.
Later hires are not as skilled as earlier hires.
Later hires do not work as hard as earlier hires.
Is not effected.
Rises at a diminishing rate and falls.
The number of workers hired.
The market wage rate.
Supply of labor should shift to the left
Demand for labor should shift to the left
Supply of labor should shift to the right
Demand for labor should shift to the right
A fall in the wage rate
An increase in the marginal productivity of labor
A decrease in the cost effectiveness of labor relative to other inputs
A decrease in the market demand for the firm's output
Increase the demand for labor and increase equilibrium wages.
Reduce the supply of labor and increase equilibrium wages.
Decrease the demand for labor and reduce equilibrium wages.
Have no impact on equilibrium wages.
Economy must be in a recession.
Labor supply curve must be backward bending.
Wages being offered are too high.
Available jobs must be very desirable and pay high wages.
Functional distribution of income
Distribution of income in Japan is closer to being equal than in the United States.
Distribution of income in Japan is as equal as in the United States.
Distribution of income in Japan is less equal than in the United States.
Relative distribution of income between the two countries is the same.