Economic Regulation Occurs When

question 48

Multiple Choice

Economic regulation occurs when:

• A) monopoly is the optimal market structure.
• B) the industry is highly competitive.
• C) the product is important to economic welfare.
• D) the government owns the assets of the industry.

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Definitions:

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in other words, when capital goods are distributed in the most beneficial manner among the population.

Production Possibilities Curve

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Competitive Markets

Markets where numerous producers and consumers interact, leading to efficient distribution of goods and services and price determination through supply and demand.

Supply and Demand

A fundamental economic model that describes how prices and quantity of goods and services are determined in a market.