Regulatory Theories and Agencies Quiz

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What is a primary concern of the Federal Communications Commission (FCC) regarding media ownership?

Increasing competition among media outlets

Promoting media monopolies

Improving the quality of media content

Stifling the full reporting of news (correct)

Which theory views regulation as influenced by market imperfections and private interests?

Libertarian Theory

Behavioral Economics

Political Economy Theory (correct)

Classical Economic Theory

What has been a major trend among federal regulators in response to technological changes?

Push for deregulation in various industries (correct)

Establishment of stricter ownership rules

Promotion of state-run media entities

Increased regulation of the telecommunications industry

What action was taken by Canada regarding Air Canada and Petro-Canada in the late 1980s and early 1990s?

Privatization and introduction of deregulation Signup and view all the answers

How can nonmarket actions influence regulatory agencies according to the political economy theory?

Both directly and indirectly through various government branches Signup and view all the answers

What is the primary purpose of government regulation?

To intervene in economic activity Signup and view all the answers

Which of the following is NOT an example of regulation?

Encouraging monopolies Signup and view all the answers

During which period did social regulation, focusing on environmental and workplace issues, begin?

1960s Signup and view all the answers

What aspect of regulatory agencies involves participation from interested parties?

Regulatory decisions and rule-making proceedings Signup and view all the answers

What major change in regulation began in the 1970s?

Economic deregulation Signup and view all the answers

What is one of the main reasons for the establishment of regulatory commissions and agencies?

To address market imperfections Signup and view all the answers

Which of the following best describes regulation?

Government intervention in economic activity Signup and view all the answers

Which regulatory change is associated with the concept of nonmarket action by interest groups?

Populist era Signup and view all the answers

What is a nonpecuniary externality?

A situation where one agent’s action impacts another's preferences or production opportunities. Signup and view all the answers

Which statement best describes a public good?

A good that is consumed collectively without reducing its availability for others. Signup and view all the answers

What does asymmetric information in a market cause?

It can result in market inefficiencies. Signup and view all the answers

How can regulation worsen market performance?

When it serves the interests of political forces instead. Signup and view all the answers

What does capture theory suggest about regulation?

Regulation evolves to benefit the industry being regulated. Signup and view all the answers

What is a requirement of the Administrative Procedure Act (APA) of 1946 regarding agency actions?

Agency actions should not be arbitrary or unlawful. Signup and view all the answers

Which theory predicts that regulation will be imposed to correct market imperfections?

Theory of market imperfections Signup and view all the answers

Which of the following is a goal of regulation related to fairness?

Providing lifeline rates for telecommunications to low-income individuals. Signup and view all the answers

A natural monopoly occurs when:

One firm can produce goods efficiently for a market. Signup and view all the answers

What is adverse selection in the context of asymmetric information?

Sellers having insufficient information about customers causing marketplace inefficiencies. Signup and view all the answers

Pecuniary externalities occur when:

One party's actions change the prices of goods affecting others. Signup and view all the answers

Moral hazard is best described as which of the following?

Inefficient actions taken due to not bearing full consequences of one's actions. Signup and view all the answers

Which of the following is NOT a type of market imperfection?

Sustainable competition Signup and view all the answers

The Political theory regarding regulation emphasizes:

Interest groups attempting to regulate in their favor. Signup and view all the answers

Which principle is used for judicial review of agency actions under the APA?

Agency actions should not be arbitrary or in violation of law. Signup and view all the answers

Which of the following best describes asymmetric information in market imperfections?

One party has more or better information than another. Signup and view all the answers