Question #4
Reading: Reading 7 Economics of Regulation
PDF File: Reading 7 Economics of Regulation.pdf
Page: 2
Status: Unattempted
Question
Which of the following regulatory interventions is theoretically least effective?
Answer Choices:
A. Imposing a punitive tax on the consumption of junk food to cut its consumption
B. Subsidizing the cost of environmentally friendly projects for small firms
C. Requiring a company to pay a fine if annual financial statements are not filed in a timely fashion
Explanation
Fining the company would place the regulatory burden on the shareholders whom the
regulation is intending to protect.