"Cream Skimming" Usually Results in

question 69

Multiple Choice

"Cream skimming" usually results in

• A)cross-subsidization of markets.
• B)subsidies to rural consumers of the service.
• C)regulations to provide universal service.
• D)monopoly.

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Definitions:

Pork-Barrel Politics

The allocation of government spending for localized projects secured primarily to bring money to a representative's district, often without proper consideration of the benefits or costs.

Principal-Agent Problem

The principal-agent problem occurs when there is a conflict of interest between a principal (owner or shareholder) and an agent (manager or executive) due to differing goals, with the agent potentially making decisions that benefit themselves at the expense of the principal.

Public Choice

A branch of economics that studies the decision-making processes of government entities and its impact on economic policy.

Regulatory Capture

A situation where regulatory agencies are dominated by the interests of the industries they are supposed to regulate, rather than serving the public interest.