One Undesirable Effect of Social Regulation Is That It

question 166

Multiple Choice

One undesirable effect of social regulation is that it

• A) affects smaller firms disproportionately, creating anticompetitive effects.
• B) destroys incentives for firms to engage in marginal cost pricing.
• C) raises prices of goods to consumers, while lowering prices to business and special interest groups.
• D) reduces the effectiveness of economic regulation.

Understand the evolution of proslavery and antislavery sentiments in the southern states leading up to the Civil War.

Knowledge of legislative and societal responses to slave rebellions and discussions on the emancipation of slaves.

Understand the concepts of demand and supply, including the determinants and how they affect the equilibrium price and quantity.

Analyze the effects of changes in the determinants of demand and supply on market equilibrium.

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Definitions:

Resale Value

The estimated market value of an asset at the end of its useful life or lease term.

Depreciation Tax Shield

The reduction in income tax expense that results from the depreciation expense on capital assets, allowing companies to save money on taxes.

Marginal Tax Rates

The rate of tax applied to the last dollar of income, which can vary depending on the income level and filing status of an individual or entity.

Straight-Line

A method of calculating depreciation of an asset, where its cost is evenly spread over its useful life.