Question 1

Per se illegality has replaced the rule of reason in analyzing the impact of joint ventures.

Accepted Answer

A) True 
 B)False  False

Question 2

The public choice theory of regulation:

Accepted Answer

A) holds that firms may have to be regulated in order to guarantee that certain goods and services are available to consumers. 
B) is often justified by pointing to such things as pollution that are not considered by firms on their own. 
C) is used to counter market failure. 
D) holds that a regulatory agency often serves the interests of government bureaucrats over those of the public. 
A) holds that firms may have to be regulated in order to guarantee that certain goods and services are available to consumers. 
B) is often justified by pointing to such things as pollution that are not considered by firms on their own. 
C) is used to counter market failure. 
D) holds that a regulatory agency often serves the interests of government bureaucrats over those of the public. D

Question 3

The _______ theory of regulation asserts that firms seek licensing requirements and government action to regulate prices to prevent other firms from entering the market.

Accepted Answer

A) public interest 
B) firm take-over 
C) monopoly 
D) capture 
A) public interest 
B) firm take-over 
C) monopoly 
D) capture C

Question 4

Consumer protection laws may make some products more expensive.

Accepted Answer

A) True 
 B)False

Question 5

Regulation is an effort by government agencies to control the choices of private firms or individuals.

Accepted Answer

A) True 
 B)False

Question 6

The public choice theory of regulation indicates that a regulatory agency:

Accepted Answer

A) encourages other regulatory agencies to deregulate their industries. 
B) seeks to find market solutions that are economically efficient. 
C) extends its regulatory powers over industries it was not intended to regulate. 
D) promotes the interests of government employees over those of the public. 
A) encourages other regulatory agencies to deregulate their industries. 
B) seeks to find market solutions that are economically efficient. 
C) extends its regulatory powers over industries it was not intended to regulate. 
D) promotes the interests of government employees over those of the public.

Question 7

According to the text authors, the more ________ airline industry today is most likely ________ the ________ industry that existed in the 1970s, and it is certainly ________ .

Accepted Answer

A) regulated; less efficient than; less regulated; less safe 
B) competitive; an improvement over; more regulated; cheaper. 
C) consolidated; less competitive; regulated; more expensive to fly now. 
D) efficient; less competitive than; regulated; more expensive 
A) regulated; less efficient than; less regulated; less safe 
B) competitive; an improvement over; more regulated; cheaper. 
C) consolidated; less competitive; regulated; more expensive to fly now. 
D) efficient; less competitive than; regulated; more expensive

Question 8

Regulation of markets and enforcement of consumer safety laws may involve the cost of:

Accepted Answer

A) economic instability. 
B) fewer products being available. 
C) the use of fewer resources in government. 
D) all of the above. 
A) economic instability. 
B) fewer products being available. 
C) the use of fewer resources in government. 
D) all of the above.

Question 9

The consolidation of firms that participate in the production of a given product line, but at different stages in the production process, is a(n):

Accepted Answer

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

Question 10

If a market is open to entry by potential rivals, that market is said to be contestable.

Accepted Answer

A) True 
 B)False

Question 11

The marketing of medicines and food is regulated by the:

Accepted Answer

A) Interstate Commerce Commission. 
B) Federal Trade Commission. 
C) Securities and Exchange Commission. 
D) Food and Drug Administration. 
A) Interstate Commerce Commission. 
B) Federal Trade Commission. 
C) Securities and Exchange Commission. 
D) Food and Drug Administration.

Question 12

Situations where whether or not a particular business practice is illegal depends on the circumstances surrounding the action are said to be subject to:

Accepted Answer

A) the rule of reason. 
B) an unfair constraint. 
C) monopolistic behavior. 
D) oligopolistic behavior. 
A) the rule of reason. 
B) an unfair constraint. 
C) monopolistic behavior. 
D) oligopolistic behavior.

Question 13

An action considered to be illegal only after considering the circumstances surrounding it is said to be illegal per se.

Accepted Answer

A) True 
 B)False

Question 14

Cooperative projects carried out by two or more firms are:

Accepted Answer

A) joint ventures. 
B) output controls. 
C) market consortiums. 
D) commodity exchanges. 
A) joint ventures. 
B) output controls. 
C) market consortiums. 
D) commodity exchanges.

Question 15

The _______ Act blocked _______ mergers where a(n)_______ in competition could be shown.

Accepted Answer

A) Clayton; horizontal; change 
B) Celler-Kefauver; vertical; reduction 
C) FTC; all; increase 
D) Robinson-Patman; vertical; reduction 
A) Clayton; horizontal; change 
B) Celler-Kefauver; vertical; reduction 
C) FTC; all; increase 
D) Robinson-Patman; vertical; reduction

Question 16

The final third of the nineteenth century saw a huge increase in the number of firms in most industries and a dramatic increase in competition.

Accepted Answer

A) True 
 B)False

Question 17

When two firms agree to collude to establish a price and eliminate price competition, it is called:

Accepted Answer

A) oligopoly. 
B) market sharing. 
C) output-shading. 
D) price-fixing. 
A) oligopoly. 
B) market sharing. 
C) output-shading. 
D) price-fixing.

Question 18

Increased global competitiveness has had no impact on antitrust policy.

Accepted Answer

A) True 
 B)False

Question 19

Attempts by the government to prevent the exercise of monopoly power is called antitrust policy.

Accepted Answer

A) True 
 B)False

Question 20

A merger which combines two or more producers of the same good is called a vertical merger.

Accepted Answer

A) True 
 B)False

Exam 16: Inflation and Unemployment

Per se illegality has replaced the rule of reason in analyzing the impact of joint ventures.

The public choice theory of regulation:

The _______ theory of regulation asserts that firms seek licensing requirements and government action to regulate prices to prevent other firms from entering the market.

Consumer protection laws may make some products more expensive.

Regulation is an effort by government agencies to control the choices of private firms or individuals.

The public choice theory of regulation indicates that a regulatory agency:

According to the text authors, the more ________ airline industry today is most likely ________ the ________ industry that existed in the 1970s, and it is certainly ________ .

Regulation of markets and enforcement of consumer safety laws may involve the cost of:

The consolidation of firms that participate in the production of a given product line, but at different stages in the production process, is a(n):

If a market is open to entry by potential rivals, that market is said to be contestable.

The marketing of medicines and food is regulated by the:

Situations where whether or not a particular business practice is illegal depends on the circumstances surrounding the action are said to be subject to:

An action considered to be illegal only after considering the circumstances surrounding it is said to be illegal per se.

Cooperative projects carried out by two or more firms are:

The _______ Act blocked _______ mergers where a(n)_______ in competition could be shown.

The final third of the nineteenth century saw a huge increase in the number of firms in most industries and a dramatic increase in competition.

When two firms agree to collude to establish a price and eliminate price competition, it is called:

Increased global competitiveness has had no impact on antitrust policy.

Attempts by the government to prevent the exercise of monopoly power is called antitrust policy.

A merger which combines two or more producers of the same good is called a vertical merger.

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

Filters

According to the text authors, the more airline industry today is most likely the industry that existed in the 1970s, and it is certainly .

The ___ Act blocked _ mergers where a(n)_____ in competition could be shown.