ARE201Lecture14aNotes

ARE201Lecture14aNotes - Lecture 14: Regulation, Safety, and...

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Lecture 14: Regulation, Safety, and Equity I. Other roles of government in the economy 1. enforce property rights 2. anti-trust 3. income redistribution 4. regulating business and consumer choices II. Enforce property rights 1. means to protect ownership of property and honoring of contracts 2. handled by police and the courts 3. contributes to trade and investing III. Anti-trust 1. enforcing the laws against collusive oligopolies and "unfair" trade practices that perpetuates monopoly 2. one action that is clearly illegal: price-fixing , where two or more companies agree to set prices or coordinate pricing policy 3. but less agreement on what constitutes anti-competitive behavior and what is just tough business tactics - good example: Microsoft 4. in anti-trust enforcement, federal government will look at proposed mergers and may deny them based on the new company having too much market power (control over sales in the market) a. horizontal merger: proposed merger of two companies that produce the same product or service b. vertical merger: proposed merger of two companies at different stages of production for the product or service c. conglomerate merger: proposed merger of two unrelated companies III. Income Redistribution 1. most controversial of potential roles of government 2. essentially means taxing money away from one individual and providing that money or resources to another individual 3. most done to address poverty:
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ARE201Lecture14aNotes - Lecture 14: Regulation, Safety, and...

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