The Interstate Commerce Commission (ICC) Regulates Railroads, Barges and Trucks

question 235

Multiple Choice

The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads. As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they get additional business. The ICC would be acting consistently with

• A) the capture theory of regulation.
• B) the public interest theory of regulation.
• C) the share-the-gains, share-the-pains theory of regulation.
• D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.

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Definitions:

Voting Power

The ability or right of an individual or group to cast a vote in an election or decision-making process.

Transfer Ownership

The act of transferring the rights, title, and interest in property or assets from one party to another, usually through sale, gift, or inheritance.

Dividends

A share of profits distributed by a corporation to its shareholders, typically made as a fixed payment per share of stock.

Free Market Ethical Perspective

An ethical viewpoint that emphasizes the importance of allowing markets to operate without undue government interference, advocating for voluntary transactions and individual liberty.