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Child labor laws
Multiple-Choice Questions:
1. A decrease in resource prices will increase the incentive of
a. users to purchase the resource.
b. suppliers to provide more of the resource.
c. firms to find and develop substitutes for the resource.
d. consumers to look for alternatives that do not contain the resource.
2. Which of the following best explains why regulatory costs will be passed on to consumers in the form
of higher prices?
a. Regardless of the reasons, higher per-unit costs will reduce supply, which will push prices upward.
b. Higher regulatory costs will increase the demand for the product, which will increase the price.
c. Higher regulatory costs will make consumers more aware of how valuable the product is to them,
which will push the price upward.
d. This is a trick question. Higher costs stemming from regulation generally do not lead to increases
in product prices.
3. How does costly government regulation of the production process typically affect the market for
the product being produced?
a. Price is lower, and output is higher.
b. Price is higher, and output is lower.
c. Both price and output are higher.
d. Both price and output are lower.
STUDENT HANDOUT
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