Bachelor of General Studies (BGS) Degree Practice Exam

How do the costs of social regulation compare to economic regulation costs?

1. Significantly lower

2. About the same

3. Significantly higher

4. Marginally higher

The correct answer is: Significantly higher

The costs of social regulation are typically considered significantly higher than those associated with economic regulation. This distinction arises from the broader scope and complexity often involved in social regulations, which aim to protect public interests, health, safety, and welfare. These types of regulations may require extensive compliance measures, monitoring, and enforcement efforts, leading to greater expenses. Social regulations encompass areas such as environmental protection, worker safety, and consumer rights. The implementation and oversight of these regulations often involve comprehensive assessments, stakeholder consultations, and ongoing evaluations to ensure compliance and effectiveness. Such processes can demand significant resources and expenditures, both from regulatory agencies and businesses that must adapt to meet these requirements. In contrast, economic regulations primarily focus on market competition and industry practices, such as price controls and monopolistic practices. While these regulations are still crucial, their implementation often does not require the same level of extensive monitoring and compliance measures as social regulations, resulting in comparatively lower overall costs. Thus, the significant difference in investment needed for compliance and enforcement between social and economic regulations leads to the conclusion that the costs associated with social regulation are substantially higher.