Final answer:
Regulations are standards established for industry, business, and government to maintain fairness and efficiency in the market and international trade. They must be based on science and not discriminate between countries with similar conditions. Businesses and governments use these regulations to align with societal values, ensure legal compliance, and check business operations.
Step-by-step explanation:
Standards that are established for the function and management of industry, business, individuals, and other parts of government are commonly referred to as regulations. These regulations include, but are not limited to, licensing requirements and safety and environmental standards which can sometimes act as informal trade barriers.
Under the World Trade Organization (WTO) rules, for instance, it is legitimate for a country to set its own standards, such as the United States requiring all food products or cars sold within its borders to meet specific safety standards.
However, regulations must be based on science and should not discriminate unjustifiably between countries under identical or similar conditions.
Businesses often establish a code of ethics to ensure their activities align with societal values and legal requirements. Local, state, and national governments also enact laws to maintain social order and ensure the fair operation of the marketplace, thus checking the actions of businesses.
The creation, revision, and enforcement of these standards are essential for maintaining fair and efficient trade both domestically and internationally.