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NEW QUESTION: 1
When the federal government imposes health and safety regulations on certain products, one of the most
likely results is:
A. Lower prices for the product.
B. Greater consumption of the product.
C. Higher prices for the product.
D. Increased supply of the product.
Choice "c" is correct. One of the consequences of greater government regulation of certain products is the
resulting higher cost to the consumer when the government imposes health and safety regulations on
certain products it is likely that expenses will increase and that the added costs will be passed on to
consumers in terms of higher prices. The total output for the product may decrease.
Choice "a" is incorrect. Since the price goes up, consumption will decrease.
Choice "b" is incorrect. The price can be expected to increase (see choice "c" Explanation: above).
Choice "d" is incorrect. Since the price goes up, supply goes down.
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