Question 1

a) Antitrust Law in the United States is a law that is used by the government to regulate business activities. State TWO (2) reasons or purposes of this law. (6 marks)

b) In your opinion, what are the THREE (3) main problems in the implementation of industry regulation in Malaysia.(7marks)

Question 2

a) Explain the economic case for social regulation that is based upon externalities. What is the meaning attached to market failure in this context? (8 marks)

b) Air pollution is a form of negative externality that results as a side effect of the industrial production process. Explain the situation using appropriate diagrams. Discuss ONE (1) action that can be taken by the government to address the problem. (12 marks)