Which of the Following Is Not a Reason Why Government

question 113

Multiple Choice

Which of the following is not a reason why government officials are willing to impose entry barriers?

• A)to raise revenue
• B)to encourage innovation which may improve the standard of living in the long run
• C)to increase economic efficiency
• D)to promote an equitable distribution of income

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Definitions:

Law of Diminishing Marginal Utility

The Law of Diminishing Marginal Utility states that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Slope Downward

A graphical representation indicating a decrease or decline in a variable as another variable increases, common in supply and demand curves.

Coase Theorem

A principle in economics that suggests that if property rights are well-defined and trade is possible without cost, parties can negotiate to resolve externalities or conflicts over resource allocation efficiently themselves.

Optimal Allocation

The most efficient distribution of resources and efforts among various possible tasks or uses to maximize desired outcomes or objectives.