Government Regulation Is

question 204

Multiple Choice

Government regulation is

• A) subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies.
• B) the only reliable way to improve environmental quality.
• C) not subject to political concerns when it comes to environmental quality.
• D) the most economically efficient way to reduce greenhouse gases.

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Definitions:

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Decreasing Returns

A condition in economics where adding more input (like labor or capital) leads to progressively smaller increases in output.

Long-Run

A term referring to a period of time in economics during which all factors of production and costs are variable.

Short-Run

A period where at least one factor of production is fixed, and firms can only adjust the variable factors.