Question 1

The Sherman Antitrust Act of 1890 prohibited

Accepted Answer

A) export tariffs. 
B) attempts to restrain trade. 
C) all existing monopolies. 
D) interstate commerce. 
A) export tariffs. 
B) attempts to restrain trade. 
C) all existing monopolies. 
D) interstate commerce.

Question 2

If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in

Accepted Answer

A) excessive economic profits to the monopoly. 
B) normal economic profits to the monopoly. 
C) losses to the monopoly. 
D) either economic profits or losses, depending on the efficiency of the monopoly. 
A) excessive economic profits to the monopoly. 
B) normal economic profits to the monopoly. 
C) losses to the monopoly. 
D) either economic profits or losses, depending on the efficiency of the monopoly.

Question 3

Acme Inc. found a tricky way to conform to the letter of the law with respect to new EPA regulations, even though they violated the spirit of the law. This is called

Accepted Answer

A) the capture theory. 
B) collusive response. 
C) share-the-gains, share-the-pains theory. 
D) creative response. 
A) the capture theory. 
B) collusive response. 
C) share-the-gains, share-the-pains theory. 
D) creative response.

Question 4

The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the

Accepted Answer

A) capitulation hypothesis. 
B) creative hypothesis. 
C) captive hypothesis. 
D) capture hypothesis. 
A) capitulation hypothesis. 
B) creative hypothesis. 
C) captive hypothesis. 
D) capture hypothesis.

Question 5

The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the

Accepted Answer

A) capture hypothesis. 
B) law of increasing social well-being. 
C) share-the-gains, share-the-pains hypothesis. 
D) marginal benefit pricing hypothesis. 
A) capture hypothesis. 
B) law of increasing social well-being. 
C) share-the-gains, share-the-pains hypothesis. 
D) marginal benefit pricing hypothesis.

Question 6

"Unfair or deceptive acts or practices in commerce" were prohibited by the

Accepted Answer

A) Clayton Act. 
B) Clayton Act as amended by the Robinson-Patman Act. 
C) Federal Trade Commission Act. 
D) 1938 amendment to the Federal Trade Commission Act. 
A) Clayton Act. 
B) Clayton Act as amended by the Robinson-Patman Act. 
C) Federal Trade Commission Act. 
D) 1938 amendment to the Federal Trade Commission Act.

Question 7

U.S. government regulation of social and economic activity

Accepted Answer

A) only began after World War II. 
B) costs less now than it did in the 1980s. 
C) has increased steadily since 1970. 
D) is confined to antitrust law. 
A) only began after World War II. 
B) costs less now than it did in the 1980s. 
C) has increased steadily since 1970. 
D) is confined to antitrust law.

Question 8

The cost of complying with regulation

Accepted Answer

A) shifts the ATC curve upward. 
B) shifts the MC curve downward. 
C) shifts the demand curve to the right. 
D) increases the products' price elasticity of demand. 
A) shifts the ATC curve upward. 
B) shifts the MC curve downward. 
C) shifts the demand curve to the right. 
D) increases the products' price elasticity of demand.

Question 9

The "primary motive" of regulators, according to the share-the-gains, share-the-pains theory, is to

Accepted Answer

A) maximize their income through accepting monetary payoffs from groups. 
B) ensure that every group gets what it wants. 
C) ensure that all customers share the benefits of regulation, and not just the wealthiest consumers. 
D) keep their jobs. 
A) maximize their income through accepting monetary payoffs from groups. 
B) ensure that every group gets what it wants. 
C) ensure that all customers share the benefits of regulation, and not just the wealthiest consumers. 
D) keep their jobs.

Question 10

The first antitrust law that the U.S. Congress enacted was

Accepted Answer

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

Question 11

Regulators often adopt policies that benefit

Accepted Answer

A) consumers and injure producers. 
B) the firms regulated rather than consumers. 
C) only the government. 
D) no one. 
A) consumers and injure producers. 
B) the firms regulated rather than consumers. 
C) only the government. 
D) no one.

Question 12

This agency is responsible for protecting consumers from products posing fire, electrical, chemical, or mechanical hazards or dangers to children.

Accepted Answer

A) Environmental Protection Agency 
B) Consumer Product Safety Commission 
C) Equal Employment Opportunity Commission 
D) Occupational Safety and Health Administration 
A) Environmental Protection Agency 
B) Consumer Product Safety Commission 
C) Equal Employment Opportunity Commission 
D) Occupational Safety and Health Administration

Question 13

A theory of regulatory behavior, which states that regulators must take into account the preferences of legislators, producers, and consumers, is the

Accepted Answer

A) capture theory. 
B) share-the-gains, share-the-pains theory. 
C) public interest theory. 
D) general interests theory. 
A) capture theory. 
B) share-the-gains, share-the-pains theory. 
C) public interest theory. 
D) general interests theory.

Question 14

A natural monopoly exists when

Accepted Answer

A) control of a key input leads to a single-firm industry. 
B) increasing marginal returns and the ability to obtain quantity discounts from suppliers leads to a single-firm industry. 
C) economies of large-scale production are substantial, leading to a single-firm industry. 
D) the government restricts entry that leads to a single-firm industry. 
A) control of a key input leads to a single-firm industry. 
B) increasing marginal returns and the ability to obtain quantity discounts from suppliers leads to a single-firm industry. 
C) economies of large-scale production are substantial, leading to a single-firm industry. 
D) the government restricts entry that leads to a single-firm industry.

Question 15

The U.S. antitrust enforcers determine whether a merger violates antitrust laws by examining

Accepted Answer

A) both the resulting change in the HHI and the level of post-merger HHI. 
B) only the resulting change in the HHI but not the level of HHI after the merger. 
C) both the size of the market after the merger and the profits of the mergers. 
D) whether the mergers are monopolies before they merge. 
A) both the resulting change in the HHI and the level of post-merger HHI. 
B) only the resulting change in the HHI but not the level of HHI after the merger. 
C) both the size of the market after the merger and the profits of the mergers. 
D) whether the mergers are monopolies before they merge.

Question 16

The idea behind antitrust legislation is to

Accepted Answer

A) promote competition in the market. 
B) justify deregulation of industries. 
C) implement contestable markets. 
D) create larger firms. 
A) promote competition in the market. 
B) justify deregulation of industries. 
C) implement contestable markets. 
D) create larger firms.

Question 17

The Federal Register

Accepted Answer

A) itemizes state and local government spending. 
B) is used to track immigration. 
C) publishes all the new federal regulatory rules. 
D) has decreased in size. 
A) itemizes state and local government spending. 
B) is used to track immigration. 
C) publishes all the new federal regulatory rules. 
D) has decreased in size.

Question 18

Under the U.S. system of regulation, most regulars are selected from

Accepted Answer

A) politicians and their friends. 
B) the industry that is to be regulated. 
C) consumer advocacy groups. 
D) university professors who understand the nature of the industry and who understand the true interests of consumers. 
A) politicians and their friends. 
B) the industry that is to be regulated. 
C) consumer advocacy groups. 
D) university professors who understand the nature of the industry and who understand the true interests of consumers.

Question 19

Which of the following is NOT exempt from antitrust laws?

Accepted Answer

A) Professional baseball 
B) Labor unions 
C) Airlines 
D) Public transit systems 
A) Professional baseball 
B) Labor unions 
C) Airlines 
D) Public transit systems

Question 20

-Which of the following is the BEST example of a natural monopoly?

Accepted Answer

A) book publisher 
B) electric utility 
C) tobacco products company 
D) airline 
A) book publisher 
B) electric utility 
C) tobacco products company 
D) airline

Exam 27: Regulation and Antitrust Policy in a Globalized Economy

The Sherman Antitrust Act of 1890 prohibited

If a public service commission requires a natural monopoly to set its price equal to the long-run marginal cost, this will result in

Acme Inc. found a tricky way to conform to the letter of the law with respect to new EPA regulations, even though they violated the spirit of the law. This is called

The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the

The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the

"Unfair or deceptive acts or practices in commerce" were prohibited by the

U.S. government regulation of social and economic activity

The cost of complying with regulation

The "primary motive" of regulators, according to the share-the-gains, share-the-pains theory, is to

The first antitrust law that the U.S. Congress enacted was

Regulators often adopt policies that benefit

This agency is responsible for protecting consumers from products posing fire, electrical, chemical, or mechanical hazards or dangers to children.

A theory of regulatory behavior, which states that regulators must take into account the preferences of legislators, producers, and consumers, is the

A natural monopoly exists when

The U.S. antitrust enforcers determine whether a merger violates antitrust laws by examining

The idea behind antitrust legislation is to

The Federal Register

Under the U.S. system of regulation, most regulars are selected from

Which of the following is NOT exempt from antitrust laws?

-Which of the following is the BEST example of a natural monopoly?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters