Econ

• General consumer protection


  • Supports and protects consumers and employees
  • Forming strong regulations
• The government supplied art eligible
• Regulations ensure safety
• Legal precautions


  Health and safety of workers
• Ownership transfer


  1. Private sector farms transfer ownership to the government

  2. This is done for firms who make 10,000 and more
• Government intervention


  • Can be harmful and ineffective
  • Firms have a lot of political power and can influence the government in various ways
• Regulatory capture may occur
• Example of regulatory capture


  • Financial crisis 2008
  • Agencies like Securities and Exchange and the Federal Reserve became too lenient on regulation they were supposed to be overseeing
• Benefits of competition


  • Prices and choice for consumers
  • Fall in supernormal profit
  • Increased efficiency
  • Improved quality
• Regulatory capture


  Regulators act in the interest of the industry rather than consumers
• Asymmetric information


  People in business know more about the market than regulators