Question 1

Critics of the regulation of natural monopolies contend that

Accepted Answer

A) regulation increases the incentive of firms to lower costs. 
B) regulated firms may use creative accounting to reduce costs, prices, and profits. 
C) when rates of return are based on the value of real capital, an uneconomic substitution of labor for capital may occur. 
D) the industry may "capture" or control the regulatory commission. 
A) regulation increases the incentive of firms to lower costs. 
B) regulated firms may use creative accounting to reduce costs, prices, and profits. 
C) when rates of return are based on the value of real capital, an uneconomic substitution of labor for capital may occur. 
D) the industry may "capture" or control the regulatory commission.

Question 2

The view that the mere possession of monopoly power is a violation of the antitrust laws, as in the Alcoa case of 1945, suggests that the application of antitrust laws should be based on industry

Accepted Answer

A) behavior. 
B) size. 
C) efficiency. 
D) structure. 
A) behavior. 
B) size. 
C) efficiency. 
D) structure.

Question 3

Over the years since the early 1900s, the U.S.government's and courts' aggressiveness in interpreting and enforcing antitrust laws have

Accepted Answer

A) been generally increasing. 
B) mostly been quite lax. 
C) fluctuated between tough and lax. 
D) been declining. 
A) been generally increasing. 
B) mostly been quite lax. 
C) fluctuated between tough and lax. 
D) been declining.

Question 4

Price-fixing is considered to be a per se violation of the antitrust laws because

Accepted Answer

A) a guilty verdict requires proof of injury to consumers. 
B) a guilty verdict requires proof of injury to other competitors. 
C) the rule of reason is applicable. 
D) a guilty verdict need only show that there was a conspiracy to fix prices, not that it succeeded. 
A) a guilty verdict requires proof of injury to consumers. 
B) a guilty verdict requires proof of injury to other competitors. 
C) the rule of reason is applicable. 
D) a guilty verdict need only show that there was a conspiracy to fix prices, not that it succeeded.

Question 5

Interlocking directorates refers to a situation where

Accepted Answer

A) a director of one firm is also a board member of a competing firm. 
B) members of the board of directors of a firm could not agree on a clear strategy for the firm. 
C) competing firms have separate and different members in their boards. 
D) a company's board splits into two rival camps locked in constant struggle. 
A) a director of one firm is also a board member of a competing firm. 
B) members of the board of directors of a firm could not agree on a clear strategy for the firm. 
C) competing firms have separate and different members in their boards. 
D) a company's board splits into two rival camps locked in constant struggle.

Question 6

(Consider This) The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving

Accepted Answer

A) monopolization. 
B) tying contracts. 
C) price-fixing. 
D) horizontal mergers.Topic: Antitrust Policy: Issues and Impacts 
A) monopolization. 
B) tying contracts. 
C) price-fixing. 
D) horizontal mergers.Topic: Antitrust Policy: Issues and Impacts

Exam 21: Antitrust Policy and Regulation

Critics of the regulation of natural monopolies contend that

The view that the mere possession of monopoly power is a violation of the antitrust laws, as in the Alcoa case of 1945, suggests that the application of antitrust laws should be based on industry

Over the years since the early 1900s, the U.S.government's and courts' aggressiveness in interpreting and enforcing antitrust laws have

Price-fixing is considered to be a per se violation of the antitrust laws because

Interlocking directorates refers to a situation where

(Consider This) The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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