Question 1

If a firm acquires the stock of a competing firm that causes a substantial lessening of competition, it would be in violation of the:

Accepted Answer

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

Question 2

The per se rule was applied in the Alcoa case.

Accepted Answer

A) True 
 B)False

Question 3

The Celler-Kefauver Act strengthened the nation's antitrust approach to merger enforcement by:

Accepted Answer

A)  making all mergers illegal. 
B)  making all conglomerate mergers illegal. 
C)  creating the Federal Trade Commission. 
D)  providing HHI guidelines the government could use to clarify antitrust enforcement. 
E)  amending the Clayton Act to include the purchase of assets with cash of another company as a potential antitrust violation. 
A)  making all mergers illegal. 
B)  making all conglomerate mergers illegal. 
C)  creating the Federal Trade Commission. 
D)  providing HHI guidelines the government could use to clarify antitrust enforcement. 
E)  amending the Clayton Act to include the purchase of assets with cash of another company as a potential antitrust violation.

Question 4

The Sherman Antitrust Act was not specific enough to eliminate monopolies in the United States.

Accepted Answer

A) True 
 B)False

Question 5

Exhibit 13-2 Public utility monopolist  
-As shown in Exhibit 13-2, if the monopolist is allowed to maximize profits, it will operate at point:

Accepted Answer

A)  X. 
B)  Y. 
C)  Z. 
D)  None of these. 
A)  X. 
B)  Y. 
C)  Z. 
D)  None of these.

Question 6

Exhibit 13-3 A monopolist  
-In Exhibit 13-3, if this industry is regulated and the regulatory commission wants price to be set equal to marginal cost, the proper price and output combination to be set is:

Accepted Answer

A)  price = $8; output = 25. 
B)  price = $8; output = 30. 
C)  price = $5; output = 40. 
D)  price = $4; output = 25. 
E)  price = $3; output = 50. 
A)  price = $8; output = 25. 
B)  price = $8; output = 30. 
C)  price = $5; output = 40. 
D)  price = $4; output = 25. 
E)  price = $3; output = 50.

Question 7

Ever since the creation of the interstate highway system, the railroads have had to compete with trucks for freight shipments. Union Pacific, the nation's largest railroad, now offers door-to-door services to clients, using their own trains and trucks. This must be the result of:

Accepted Answer

A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  deregulation. 
E)  high fuel prices. 
A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  deregulation. 
E)  high fuel prices.

Question 8

The Celler-Kefauver Act is primarily concerned with prohibiting:

Accepted Answer

A)  monopolization. 
B)  unfair business practices. 
C)  predatory pricing. 
D)  anticompetitive mergers. 
A)  monopolization. 
B)  unfair business practices. 
C)  predatory pricing. 
D)  anticompetitive mergers.

Question 9

The first piece of antitrust legislation in the United States to deal with price discrimination was the:

Accepted Answer

A)  Clayton Act. 
B)  FTC Act. 
C)  Celler-Kefauver Act. 
D)  Robinson-Patman Act. 
E)  Sherman Antitrust Act. 
A)  Clayton Act. 
B)  FTC Act. 
C)  Celler-Kefauver Act. 
D)  Robinson-Patman Act. 
E)  Sherman Antitrust Act.

Question 10

Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?

Accepted Answer

A)  Sherman Antitrust Act of 1890. 
B)  Clayton Act of 1914. 
C)  Federal Trade Commission Act of 1914. 
D)  Robinson-Patman Act of 1936. 
E)  Cell-Kefauver Act of 1950. 
A)  Sherman Antitrust Act of 1890. 
B)  Clayton Act of 1914. 
C)  Federal Trade Commission Act of 1914. 
D)  Robinson-Patman Act of 1936. 
E)  Cell-Kefauver Act of 1950.

Question 11

The landmark antitrust case which established that size alone can be an antitrust violation is the:

Accepted Answer

A)  U.S. Steel case. 
B)  Brown Shoe case. 
C)  Von's Grocery case. 
D)  ALCOA case. 
E)  Pabst Brewing case. 
A)  U.S. Steel case. 
B)  Brown Shoe case. 
C)  Von's Grocery case. 
D)  ALCOA case. 
E)  Pabst Brewing case.

Question 12

Although U.S. Steel controlled nearly 75 percent of the domestic iron and steel industry, in 1920 the Supreme Court ruled that the firm was not in violation of the Sherman Antitrust Act because there was no evidence of abusive behavior. What antitrust doctrine was the court applying in this case?

Accepted Answer

A)  The rule of reason. 
B)  The per se rule. 
C)  The marginal cost pricing rule. 
D)  The natural monopoly rule. 
A)  The rule of reason. 
B)  The per se rule. 
C)  The marginal cost pricing rule. 
D)  The natural monopoly rule.

Question 13

It is not possible for a regulated public utility to earn economic profits in the short run.

Accepted Answer

A) True 
 B)False

Question 14

Price discrimination that tends to lessen competition is outlawed by the:

Accepted Answer

A)  Sherman Antitrust Act. 
B)  Clayton Act. 
C)  Federal Trade Commission Act. 
D)  Interstate Commerce Act. 
A)  Sherman Antitrust Act. 
B)  Clayton Act. 
C)  Federal Trade Commission Act. 
D)  Interstate Commerce Act.

Question 15

The Federal Trade Commission Act was passed in:

Accepted Answer

A)  1890. 
B)  1914. 
C)  1929. 
D)  1933. 
A)  1890. 
B)  1914. 
C)  1929. 
D)  1933.

Question 16

Under an exclusive buying arrangement, a retailer agrees to sell a good at the manufacturer's suggested retail price.

Accepted Answer

A) True 
 B)False

Question 17

In the United States, regulation increased steadily in the areas of health, safety, and the environment during:

Accepted Answer

A)  the Great Depression. 
B)  World War II. 
C)  the 1970s. 
D)  the 1980s. 
A)  the Great Depression. 
B)  World War II. 
C)  the 1970s. 
D)  the 1980s.

Question 18

The practice of firms temporarily reducing prices in order to eliminate competition is called:

Accepted Answer

A)  competitive pricing. 
B)  predatory pricing. 
C)  discount pricing. 
D)  strategic pricing. 
A)  competitive pricing. 
B)  predatory pricing. 
C)  discount pricing. 
D)  strategic pricing.

Question 19

The Clayton Act was passed in:

Accepted Answer

A)  1887. 
B)  1890. 
C)  1914. 
D)  1936. 
E)  1952. 
A)  1887. 
B)  1890. 
C)  1914. 
D)  1936. 
E)  1952.

Question 20

The most important weakness of the Sherman Antitrust Act was that:

Accepted Answer

A)  the Supreme Court refused to enforce it. 
B)  it wasn't specific about the types of acts which would violate the law. 
C)  it didn't outlaw restraints of trade. 
D)  it was too complicated. 
E)  it was too specific. 
A)  the Supreme Court refused to enforce it. 
B)  it wasn't specific about the types of acts which would violate the law. 
C)  it didn't outlaw restraints of trade. 
D)  it was too complicated. 
E)  it was too specific.

If a firm acquires the stock of a competing firm that causes a substantial lessening of competition, it would be in violation of the:

The per se rule was applied in the Alcoa case.

The Celler-Kefauver Act strengthened the nation's antitrust approach to merger enforcement by:

The Sherman Antitrust Act was not specific enough to eliminate monopolies in the United States.

Exhibit 13-2 Public utility monopolist -As shown in Exhibit 13-2, if the monopolist is allowed to maximize profits, it will operate at point:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this industry is regulated and the regulatory commission wants price to be set equal to marginal cost, the proper price and output combination to be set is:

Ever since the creation of the interstate highway system, the railroads have had to compete with trucks for freight shipments. Union Pacific, the nation's largest railroad, now offers door-to-door services to clients, using their own trains and trucks. This must be the result of:

The Celler-Kefauver Act is primarily concerned with prohibiting:

The first piece of antitrust legislation in the United States to deal with price discrimination was the:

Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?

The landmark antitrust case which established that size alone can be an antitrust violation is the:

Although U.S. Steel controlled nearly 75 percent of the domestic iron and steel industry, in 1920 the Supreme Court ruled that the firm was not in violation of the Sherman Antitrust Act because there was no evidence of abusive behavior. What antitrust doctrine was the court applying in this case?

It is not possible for a regulated public utility to earn economic profits in the short run.

Price discrimination that tends to lessen competition is outlawed by the:

The Federal Trade Commission Act was passed in:

Under an exclusive buying arrangement, a retailer agrees to sell a good at the manufacturer's suggested retail price.

In the United States, regulation increased steadily in the areas of health, safety, and the environment during:

The practice of firms temporarily reducing prices in order to eliminate competition is called:

The Clayton Act was passed in:

The most important weakness of the Sherman Antitrust Act was that:

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

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Exam 13: Antitrust and Regulation

If a firm acquires the stock of a competing firm that causes a substantial lessening of competition, it would be in violation of the:

The per se rule was applied in the Alcoa case.

The Celler-Kefauver Act strengthened the nation's antitrust approach to merger enforcement by:

The Sherman Antitrust Act was not specific enough to eliminate monopolies in the United States.

Exhibit 13-2 Public utility monopolist -As shown in Exhibit 13-2, if the monopolist is allowed to maximize profits, it will operate at point:

Exhibit 13-3 A monopolist -In Exhibit 13-3, if this industry is regulated and the regulatory commission wants price to be set equal to marginal cost, the proper price and output combination to be set is:

Ever since the creation of the interstate highway system, the railroads have had to compete with trucks for freight shipments. Union Pacific, the nation's largest railroad, now offers door-to-door services to clients, using their own trains and trucks. This must be the result of:

The Celler-Kefauver Act is primarily concerned with prohibiting:

The first piece of antitrust legislation in the United States to deal with price discrimination was the:

Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?

The landmark antitrust case which established that size alone can be an antitrust violation is the:

Although U.S. Steel controlled nearly 75 percent of the domestic iron and steel industry, in 1920 the Supreme Court ruled that the firm was not in violation of the Sherman Antitrust Act because there was no evidence of abusive behavior. What antitrust doctrine was the court applying in this case?

It is not possible for a regulated public utility to earn economic profits in the short run.

Price discrimination that tends to lessen competition is outlawed by the:

The Federal Trade Commission Act was passed in:

Under an exclusive buying arrangement, a retailer agrees to sell a good at the manufacturer's suggested retail price.

In the United States, regulation increased steadily in the areas of health, safety, and the environment during:

The practice of firms temporarily reducing prices in order to eliminate competition is called:

The Clayton Act was passed in:

The most important weakness of the Sherman Antitrust Act was that:

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

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