Question 1

A downward-sloping demand curve that incorporates the firm's expectations of what other firms will do is called a

Accepted Answer

A)  compensated demand curve. 
B)  independent demand curve. 
C)  uncompensated demand curve. 
D)  consumer's demand curve. 
E)  strategic demand curve. 
A)  compensated demand curve. 
B)  independent demand curve. 
C)  uncompensated demand curve. 
D)  consumer's demand curve. 
E)  strategic demand curve.

Question 2

Lawsuits against alleged price fixers can be brought

Accepted Answer

A)  directly by the Justice Department but not by the individual firms harmed by the price fixing. 
B)  neither directly by the Justice Department nor by the individual firms harmed by the price fixing. 
C)  not directly by the Justice Department but by the individual firms harmed by the price fixing. 
D)  directly by the Justice Department and by the individual firms harmed by the price fixing. 
E)  by the Justice Department only after they are brought by the individual firms harmed by the price fixing. 
A)  directly by the Justice Department but not by the individual firms harmed by the price fixing. 
B)  neither directly by the Justice Department nor by the individual firms harmed by the price fixing. 
C)  not directly by the Justice Department but by the individual firms harmed by the price fixing. 
D)  directly by the Justice Department and by the individual firms harmed by the price fixing. 
E)  by the Justice Department only after they are brought by the individual firms harmed by the price fixing.

Question 3

The table below shows the market shares of firms in three different industries.

Accepted Answer

The answer of The table below shows the market shares...

Question 4

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

Accepted Answer

A)  Making marginal cost equal to marginal revenue pricing 
B)  Setting prices for a period and then allowing the firm to keep any profits made over that period 
C)  Average variable cost pricing 
D)  Threatening to shut down the firm 
E)  Fixed cost pricing 
A)  Making marginal cost equal to marginal revenue pricing 
B)  Setting prices for a period and then allowing the firm to keep any profits made over that period 
C)  Average variable cost pricing 
D)  Threatening to shut down the firm 
E)  Fixed cost pricing

Question 5

In 1920, the U.S. government was successful in using the Sherman Antitrust Act against U.S. Steel.

Accepted Answer

A) True 
 B)False

Question 6

Soft drink distributors commonly use the practice of

Accepted Answer

A)  price discrimination. 
B)  horizontal mergers. 
C)  resale price maintenance. 
D)  exclusive territories. 
E)  price fixing. 
A)  price discrimination. 
B)  horizontal mergers. 
C)  resale price maintenance. 
D)  exclusive territories. 
E)  price fixing.

Question 7

Which of the following markets has the highest Herfindahl-Hirschman index?

Accepted Answer

A)  Eight firms of exactly the same size 
B)  Three firms of widely differing sizes 
C)  Three firms of exactly the same size 
D)  Twenty firms of widely differing sizes 
E)  Twenty firms of exactly the same size 
A)  Eight firms of exactly the same size 
B)  Three firms of widely differing sizes 
C)  Three firms of exactly the same size 
D)  Twenty firms of widely differing sizes 
E)  Twenty firms of exactly the same size

Question 8

An unregulated natural monopoly

Accepted Answer

A)  could produce output at higher costs than two firms could if it supplied all the quantity that buyers would take off the market. 
B)  will charge a price equal to marginal cost. 
C)  would produce efficiently if it behaved as a normal profit-maximizing monopoly. 
D)  will likely force society to face a deadweight loss. 
E)  will charge a price below marginal cost. 
A)  could produce output at higher costs than two firms could if it supplied all the quantity that buyers would take off the market. 
B)  will charge a price equal to marginal cost. 
C)  would produce efficiently if it behaved as a normal profit-maximizing monopoly. 
D)  will likely force society to face a deadweight loss. 
E)  will charge a price below marginal cost.

Question 9

In a natural monopoly, long-run average total cost decreases as output increases.

Accepted Answer

A) True 
 B)False

Question 10

Predatory pricing is being practiced when firms sell products to make large, short-run profits.

Accepted Answer

A) True 
 B)False

Question 11

Given that increased market power results in deadweight loss, should government policy be designed to inhibit firms from gaining market power?

Accepted Answer

Not always. The profits that go with mar

Question 12

Regulation of a natural monopoly could give an economy the advantages of

Accepted Answer

A)  one-firm efficiency without competition-like behavior. 
B)  competition-like behavior but not one-firm efficiency. 
C)  one-firm efficiency and competition-like behavior. 
D)  neither one-firm efficiency nor competition-like behavior. 
E)  dealing with only one firm rather than many firms as in perfect competition. 
A)  one-firm efficiency without competition-like behavior. 
B)  competition-like behavior but not one-firm efficiency. 
C)  one-firm efficiency and competition-like behavior. 
D)  neither one-firm efficiency nor competition-like behavior. 
E)  dealing with only one firm rather than many firms as in perfect competition.

Question 13

The main purpose of antitrust law is to promote competition and control monopoly power.

Accepted Answer

A) True 
 B)False

Question 14

A contract condition whereby a manufacturer does not allow a retailer to sell goods made by a competing manufacturer is called

Accepted Answer

A)  uncontested trading. 
B)  boycott dealing. 
C)  market fixing. 
D)  exclusive dealing. 
E)  resale price maintenance. 
A)  uncontested trading. 
B)  boycott dealing. 
C)  market fixing. 
D)  exclusive dealing. 
E)  resale price maintenance.

Question 15

The combining of two firms that sell the same good or type of good is called a

Accepted Answer

A)  conglomerate merger. 
B)  competitive merger. 
C)  vertical merger. 
D)  cartel. 
E)  horizontal merger. 
A)  conglomerate merger. 
B)  competitive merger. 
C)  vertical merger. 
D)  cartel. 
E)  horizontal merger.

Question 16

If the value of the Herfindahl-Hirschman index is 10,000, then there must be a monopoly in the industry.

Accepted Answer

A) True 
 B)False

Question 17

Deregulation is the

Accepted Answer

A)  increase in antitrust policy regulations. 
B)  phasing out of past regulations. 
C)  switching of regulation from the federal level to the state level. 
D)  switching of regulation from the local level to the federal level. 
E)  change from economic regulation to social regulation. 
A)  increase in antitrust policy regulations. 
B)  phasing out of past regulations. 
C)  switching of regulation from the federal level to the state level. 
D)  switching of regulation from the local level to the federal level. 
E)  change from economic regulation to social regulation.

Question 18

Which of the following statements about the Sherman Antitrust Act is false?

Accepted Answer

A)  Section 2 of the act makes attempts to monopolize illegal. 
B)  It established the Antitrust Division of the U.S. Justice Department. 
C)  Section 1 of the act makes price fixing illegal. 
D)  It is a law that aims at reducing anticompetitive behavior. 
E)  It is a law passed in the United States in 1890. 
A)  Section 2 of the act makes attempts to monopolize illegal. 
B)  It established the Antitrust Division of the U.S. Justice Department. 
C)  Section 1 of the act makes price fixing illegal. 
D)  It is a law that aims at reducing anticompetitive behavior. 
E)  It is a law passed in the United States in 1890.

Question 19

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Accepted Answer

A) True 
 B)False

Question 20

Average total cost pricing gives the firm being regulated no incentive to cut costs.

Accepted Answer

A) True 
 B)False

A downward-sloping demand curve that incorporates the firm's expectations of what other firms will do is called a

Lawsuits against alleged price fixers can be brought

The table below shows the market shares of firms in three different industries.

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

In 1920, the U.S. government was successful in using the Sherman Antitrust Act against U.S. Steel.

Soft drink distributors commonly use the practice of

Which of the following markets has the highest Herfindahl-Hirschman index?

An unregulated natural monopoly

In a natural monopoly, long-run average total cost decreases as output increases.

Predatory pricing is being practiced when firms sell products to make large, short-run profits.

Given that increased market power results in deadweight loss, should government policy be designed to inhibit firms from gaining market power?

Regulation of a natural monopoly could give an economy the advantages of

The main purpose of antitrust law is to promote competition and control monopoly power.

A contract condition whereby a manufacturer does not allow a retailer to sell goods made by a competing manufacturer is called

The combining of two firms that sell the same good or type of good is called a

If the value of the Herfindahl-Hirschman index is 10,000, then there must be a monopoly in the industry.

Deregulation is the

Which of the following statements about the Sherman Antitrust Act is false?

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Average total cost pricing gives the firm being regulated no incentive to cut costs.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters

Exam 12: Antitrust Policy and Regulation

A downward-sloping demand curve that incorporates the firm's expectations of what other firms will do is called a

Lawsuits against alleged price fixers can be brought

The table below shows the market shares of firms in three different industries.

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

In 1920, the U.S. government was successful in using the Sherman Antitrust Act against U.S. Steel.

Soft drink distributors commonly use the practice of

Which of the following markets has the highest Herfindahl-Hirschman index?

An unregulated natural monopoly

In a natural monopoly, long-run average total cost decreases as output increases.

Predatory pricing is being practiced when firms sell products to make large, short-run profits.

Given that increased market power results in deadweight loss, should government policy be designed to inhibit firms from gaining market power?

Regulation of a natural monopoly could give an economy the advantages of

The main purpose of antitrust law is to promote competition and control monopoly power.

A contract condition whereby a manufacturer does not allow a retailer to sell goods made by a competing manufacturer is called

The combining of two firms that sell the same good or type of good is called a

If the value of the Herfindahl-Hirschman index is 10,000, then there must be a monopoly in the industry.

Deregulation is the

Which of the following statements about the Sherman Antitrust Act is false?

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Average total cost pricing gives the firm being regulated no incentive to cut costs.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters