Incentive-based regulatory approaches: O are viewed favorably by most economists as a wayi O provide less flexibility than the command-and-contr O tend to hurt wealthier people more than poor people.
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- How does politics impact the issue of cost benefit analysis from a regulatory perspective? How does this issue impact the ability of a government intervention to achieve parato efficiency? Explain fully with examples? Does it matter if we are talking about a democracy versus a non-democratic government with differing market institutions? Explain.Adam Smith proposed taxing ‘Sugar, rum and tobacco’ because they are: “nowhere necessaries of life” “objects of almost universal consumption” In consumer theory economics, what is the difference between a necessity and a luxury good. What is the likely difference in the tax revenue obtained from a tax imposed on a necessity versus a luxury good? Explain and illustrate with appropriate figures. Question Requirements: Identify the difference between a necessity and luxury and provide an example. Highlight ability to identify the link of this definition to tax revenue. Highlight ability to encapsulate this concept precisely using correctly drawn figure.Marijuana sales, primarily for medical use but also recreational sales (in some states,) have become big business and an economic boon to many states. Yet at the federal level, marijuana is still a Schedule 1 drug and illegal under the Controlled Substances Act (21U.S.C. Sec. 811). How is it possible, then, for states to cultivate and sell marijuana without federal intervention? What is the role of each of the three branches of government with regard to policing and regulating marijuana use? What has caused the national “sea change” with regard to legalizing its use?
- Qd = 180 - 2P, Qs = ‐ 15 + P The market is government-regulated with a price support per unit and production quotas. If the price is set at $72 per unit, what production quota is needed to make sure there are no shortages or surpluses? a.an increase in the demand for the good. new demand equation is Qd = 190 - 2P. The government is trying to decide between two options: Maintain the number of quotas and let the market adjust, or Maintain the price support and increase the number of quotas. Suppose that the government decides to maintain the number of quotas and let the market adjust, what is: The price observed in the market? The consumer surplus? The producer surplus? The deadweight loss? b. Suppose the government decides to increase the number of quotas available to 72 units but it keeps the price support at the current level of $72, what is: The consumer surplus? The producer surplus? The deadweight loss? c. Which of the government options in 1a. will be preferred by: The Producers?…Name several nongovernmental regulatory forces.Do you believe self-regulation is more or lesseffective than governmental regulatoryagencies? Why?No government can sustain or effectively operate without it's powers. Enumerate and discuss each of the inherent powers of the state.
- If the government chooses to employ economic regulation, what are the 2 price/output options they might use? How would those options improve social welfare? Are there any drawbacks with respect to those optionsA3 What effect will a properly passed statute have on inconsistent judge-made law (case Law) in Canada?1. Recall the regulation model where legislators apply regulations to garner votes. Votes are a function of producer utility (UR ) and consumer utility (UC ). The legislator’s vote/utility function is V = V(UR , UC ). If U R = R, and U C = K – R – L, where K is a constant and R and L are the typical monopoly versus competitive market outcome below. Obviously, both U R and U C are affected by the eventual price (P) set by the legislator because both R and L are affected by that price. (a) Now suppose the demand equation is given by P = 100 - Q , and MC = $20. Write R as a function of the price and show that the price that maximizes producer utility is $60. (b) Given the MC and demand equation above, find the maximum possible consumer surplus (hint: this will be when the market is competitive). (c) Now suppose that (in addition to the information in parts d and e), the legislator gets votes according to V (U R, U C ) = 3U R + U C . Find the price that maximizes the legislator’s votes.
- AT10 million dollar. Lobbying Congress to block entry of competitors into the telephone market in 1978. Why do you think it efforts failed?Say that the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million people living there, and each would benefit by 200 from this smoking ban. However, there are two large tobacco companies in Tobaccoville and the ban would cost them $5 million each. What are the proposed policys total costs and benefits? Do you think it will pass?In a recent benefit-cost analysis of a proposed regulation that generated negative net benefits in the present but positive net benefits in the future, the government used a 5% social discount rate. If it had instead used a 3% social discount rate, the net present value of the policy would have been ______; if it had used an 8% social discount rate, the net present value would have been ______. Select one: a. lower; lower. b. lower; higher. c. higher; higher. d. higher; lower.