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Reading 15: Regulation and Antitrust Policy in a Globalize

Q1. Three years ago, regulators enacted a new law that was designed to reduce cigarette smoking by banning it in public workspaces. A recent consumer survey has indicated that although smoking is banned in the workplace, people are smoking even more than before, but in their homes and cars. Consumer reaction to the regulation can best be described as:

A)   the capture hypothesis.

B)   creative response.

C)   a feedback effect.

Q2. Consumers sometimes alter their behavior in response to the implementation of a new regulation. This unintended consequence of regulation is:

A)   a cost of regulation.

B)   a creative response.

C)   a feedback effect.

Q3. A firm that disagrees with a particular regulation and attempts to avoid it by complying with the specifics of the law but not the intent of the law is demonstrating:

A)   social regulation.

B)   creative response.

C)   the capture hypothesis.

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