Question 1

Under a per se approach to the antitrust laws,

Accepted Answer

A)  the government must prove some anticompetitive outcome from the act. 
B)  large size alone can be an antitrust violation. 
C)  the action will pass antitrust scrutiny if it is shown to be reasonable. 
D)  the only real question is whether the prices charged are reasonable. 
E)  the courts have ruled antitrust laws unconstitutional 
A)  the government must prove some anticompetitive outcome from the act. 
B)  large size alone can be an antitrust violation. 
C)  the action will pass antitrust scrutiny if it is shown to be reasonable. 
D)  the only real question is whether the prices charged are reasonable. 
E)  the courts have ruled antitrust laws unconstitutional

Question 2

A conglomerate occurs when:

Accepted Answer

A)  the products of the merging firms were not related in any manner before the merger 
B)  one firm is a producer of products, and the other firm is a producer of services 
C)  one firm is a domestic firm, and the other is a foreign company 
D)  the firms stood in a buyer-seller relationship before the merger 
E)  the merger partners were competitors 
A)  the products of the merging firms were not related in any manner before the merger 
B)  one firm is a producer of products, and the other firm is a producer of services 
C)  one firm is a domestic firm, and the other is a foreign company 
D)  the firms stood in a buyer-seller relationship before the merger 
E)  the merger partners were competitors

Question 3

Exhibit 13-3 A monopolist  
-In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:

Accepted Answer

A)  price = $8; output = 25. 
B)  price = $8; output = 30. 
C)  price = $5; output = 40. 
D)  price = $4; output = 25. 
E)  price = $10; output = 25. 
A)  price = $8; output = 25. 
B)  price = $8; output = 30. 
C)  price = $5; output = 40. 
D)  price = $4; output = 25. 
E)  price = $10; output = 25.

Question 4

Which of the following describes a tying contract?

Accepted Answer

A)  The seller of one product requires the buyer to purchase some other product(s). 
B)  One firm buys the stock of a competing firm. 
C)  The directors of one company serve on the board of directors of another company in the same industry. 
D)  An agreement between a manufacturer and a retailer based on the condition that the retailer is not to carry any rival products of the manufacturer. 
A)  The seller of one product requires the buyer to purchase some other product(s). 
B)  One firm buys the stock of a competing firm. 
C)  The directors of one company serve on the board of directors of another company in the same industry. 
D)  An agreement between a manufacturer and a retailer based on the condition that the retailer is not to carry any rival products of the manufacturer.

Question 5

In order to obtain a conviction for price fixing under the Sherman Antitrust Act, the government needs to prove:

Accepted Answer

A)  only that an attempt to fix prices was made. 
B)  that there was a price-fixing agreement that actually lessened competition. 
C)  that there was a high concentration ratio for the industry. 
D)  all of these. 
A)  only that an attempt to fix prices was made. 
B)  that there was a price-fixing agreement that actually lessened competition. 
C)  that there was a high concentration ratio for the industry. 
D)  all of these.

Question 6

The purchase of Michelin Tire Company by General Motors is an example of a horizontal merger.

Accepted Answer

A) True 
 B)False

Question 7

The Federal Trade Commission is charged with protecting consumers from false and misleading advertising.

Accepted Answer

A) True 
 B)False

Question 8

If regulation imposes marginal cost pricing on a natural monopoly, then the monopoly will:

Accepted Answer

A)  suffer persistent economic losses. 
B)  earn a fair, but not excessive, return on its assets. 
C)  produce too little output to achieve efficiency. 
D)  experience diseconomies of scale. 
A)  suffer persistent economic losses. 
B)  earn a fair, but not excessive, return on its assets. 
C)  produce too little output to achieve efficiency. 
D)  experience diseconomies of scale.

Question 9

A horizontal merger is one in which the merging firms:

Accepted Answer

A)  are about the same size. 
B)  produce the same good in the same industry. 
C)  will control greater than 50 percent of the market. 
D)  have never directly competed in the past. 
E)  will pay twice as much in taxes. 
A)  are about the same size. 
B)  produce the same good in the same industry. 
C)  will control greater than 50 percent of the market. 
D)  have never directly competed in the past. 
E)  will pay twice as much in taxes.

Question 10

The Federal Trade Commission is charged with:

Accepted Answer

A)  supervising cartels in the United States. 
B)  aiding small business in contract negotiations with foreign companies. 
C)  investigating unfair and deceptive trade practices. 
D)  approving contracts between businesses and government. 
E)  bringing criminal complaints. 
A)  supervising cartels in the United States. 
B)  aiding small business in contract negotiations with foreign companies. 
C)  investigating unfair and deceptive trade practices. 
D)  approving contracts between businesses and government. 
E)  bringing criminal complaints.

Question 11

Exhibit 13-3 A monopolist  
-In Exhibit 13-3, if this industry is regulated and the regulatory commission sets price equal to marginal cost, then:

Accepted Answer

A)  this firm would earn excess profit. 
B)  price would equal ATC. 
C)  the firm would suffer losses. 
D)  revenue would just be sufficient to cover costs. 
E)  total revenue would just cover marginal cost. 
A)  this firm would earn excess profit. 
B)  price would equal ATC. 
C)  the firm would suffer losses. 
D)  revenue would just be sufficient to cover costs. 
E)  total revenue would just cover marginal cost.

Question 12

The rule of reason was applied in the Alcoa case.

Accepted Answer

A) True 
 B)False

Question 13

When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:

Accepted Answer

A)  countervailing power. 
B)  economies of scale. 
C)  per se. 
D)  rule of reason. 
E)  natural monopoly. 
A)  countervailing power. 
B)  economies of scale. 
C)  per se. 
D)  rule of reason. 
E)  natural monopoly.

Question 14

The Sherman Antitrust Act:

Accepted Answer

A)  prohibited restraint of trade. 
B)  created the Federal Trade Commission. 
C)  prohibited fraudulent advertising. 
D)  regulated the railroads. 
A)  prohibited restraint of trade. 
B)  created the Federal Trade Commission. 
C)  prohibited fraudulent advertising. 
D)  regulated the railroads.

Question 15

The importance of the Federal Trade Commission Act of 1914 is that it:

Accepted Answer

A)  set up an independent antitrust agency with the power to bring court cases. 
B)  strengthened the law against mergers. 
C)  strengthened the law against price discrimination. 
D)  all of these. 
A)  set up an independent antitrust agency with the power to bring court cases. 
B)  strengthened the law against mergers. 
C)  strengthened the law against price discrimination. 
D)  all of these.

Question 16

If one software company conspired with another software company to raise prices, this would be in violation of the:

Accepted Answer

A)  Federal Trade Commission Act. 
B)  Clayton Act. 
C)  Sherman Antitrust Act. 
D)  Robinson-Patman Act. 
A)  Federal Trade Commission Act. 
B)  Clayton Act. 
C)  Sherman Antitrust Act. 
D)  Robinson-Patman Act.

Question 17

Which of following is responsible for investigating fraudulent advertising? ​

Accepted Answer

A)  ​Federal Reserve 
B)  ​Bureau of Standards 
C)  ​Federal Trade Commission 
D)  ​Department of Justice. 
A)  ​Federal Reserve 
B)  ​Bureau of Standards 
C)  ​Federal Trade Commission 
D)  ​Department of Justice.

Question 18

The Celler-Kefauver Act was passed because the Clayton Act had not been effective against mergers.

Accepted Answer

A) True 
 B)False

Question 19

Prior to 1914, did antitrust legislation have much effect on monopoly power in the United States?

Accepted Answer

The Sherman Antitrust Act passed in 1890

Question 20

A merger between firms that compete in the same market is called a:

Accepted Answer

A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  monopoly. 
A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  monopoly.

Under a per se approach to the antitrust laws,

A conglomerate occurs when:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:

Which of the following describes a tying contract?

In order to obtain a conviction for price fixing under the Sherman Antitrust Act, the government needs to prove:

The purchase of Michelin Tire Company by General Motors is an example of a horizontal merger.

The Federal Trade Commission is charged with protecting consumers from false and misleading advertising.

If regulation imposes marginal cost pricing on a natural monopoly, then the monopoly will:

A horizontal merger is one in which the merging firms:

The Federal Trade Commission is charged with:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this industry is regulated and the regulatory commission sets price equal to marginal cost, then:

The rule of reason was applied in the Alcoa case.

When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:

The Sherman Antitrust Act:

The importance of the Federal Trade Commission Act of 1914 is that it:

If one software company conspired with another software company to raise prices, this would be in violation of the:

Which of following is responsible for investigating fraudulent advertising?

The Celler-Kefauver Act was passed because the Clayton Act had not been effective against mergers.

Prior to 1914, did antitrust legislation have much effect on monopoly power in the United States?

A merger between firms that compete in the same market is called a:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 13: Antitrust and Regulation

Under a per se approach to the antitrust laws,

A conglomerate occurs when:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:

Which of the following describes a tying contract?

In order to obtain a conviction for price fixing under the Sherman Antitrust Act, the government needs to prove:

The purchase of Michelin Tire Company by General Motors is an example of a horizontal merger.

The Federal Trade Commission is charged with protecting consumers from false and misleading advertising.

If regulation imposes marginal cost pricing on a natural monopoly, then the monopoly will:

A horizontal merger is one in which the merging firms:

The Federal Trade Commission is charged with:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this industry is regulated and the regulatory commission sets price equal to marginal cost, then:

The rule of reason was applied in the Alcoa case.

When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:

The Sherman Antitrust Act:

The importance of the Federal Trade Commission Act of 1914 is that it:

If one software company conspired with another software company to raise prices, this would be in violation of the:

Which of following is responsible for investigating fraudulent advertising? ​

The Celler-Kefauver Act was passed because the Clayton Act had not been effective against mergers.

Prior to 1914, did antitrust legislation have much effect on monopoly power in the United States?

A merger between firms that compete in the same market is called a:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Which of following is responsible for investigating fraudulent advertising?