The Ability of State and Local Governments to Shape the Economy

question 47

Multiple Choice

The ability of state and local governments to shape the economy

• A) comes from their police powers to regulate health and safety.
• B) is limited because the Constitution grants the national government authority over intrastate commerce.
• C) comes from explicit delegation from Congress.
• D) is permissible due to the interstate commerce clause.
• E) is significantly limited by their inability to offer benefits to companies such as tax breaks.

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Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, homogenous products, free entry and exit from the market, and full information availability, leading to no single firm influencing the market price.

Concentration Ratio

A metric used in economics to assess the degree of market concentration by measuring the market share of the largest firms within an industry.

Largest Firms

Companies that dominate their industries or markets, often characterized by significant revenue, global presence, and market influence.

Profits

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.