When Regulators Become Captives of Industry, They May

question 21

Multiple Choice

When regulators become captives of industry, they may

• A)increase economic efficiency in the market.
• B)support firms that resist demands for wage increases.
• C)increase competition in an industry.
• D)help a firm reallocate out of an industry in which it has losses.
• E)prevent some firms from failing by keeping their prices high.

---

Definitions:

Ingroup Bias

The inclination to prefer individuals from one's own group above those from outsider groups, frequently resulting in bias and unfair treatment.

Free Riders

Individuals or entities that benefit from resources, goods, or services without paying for them or contributing to their provision.

Common Resource

A type of good that is accessible to all members of a community or society but is susceptible to overuse and depletion.

Disjunctive Tasks

Tasks in which the performance of the group is determined by the performance of the best individual member.