There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
—Frederic Bastiat (1801–1850)
Chapter 8 Preview
When you have completed reading this chapter you will:
• be aware of “regulatory capture” and the use and misuse of cost benefit analysis (CBA) in local government regulation;
• consider how the compliance costs of regulation affect price and output;
• differentiate between regulations affecting parties directly involved with a transaction and those associated with third party external effects;
• assess ...