Question 1

The Celler-Kefauver Act of 1950

Accepted Answer

A) modified patent legislation by reducing the number of years over which a patent is applicable. 
B) prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition. 
C) declared all conglomerate mergers to be illegal. 
D) prohibited any firm from buying the stock of another firm where the effect was to lessen competition. 
A) modified patent legislation by reducing the number of years over which a patent is applicable. 
B) prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition. 
C) declared all conglomerate mergers to be illegal. 
D) prohibited any firm from buying the stock of another firm where the effect was to lessen competition.

Question 2

Which would be an example of public ownership as a response to natural monopolies?

Accepted Answer

A) Federal Energy Regulatory Commission 
B) Federal Trade Commission 
C) U.S.Food and Drug Administration 
D) U.S.Postal Service 
A) Federal Energy Regulatory Commission 
B) Federal Trade Commission 
C) U.S.Food and Drug Administration 
D) U.S.Postal Service

Question 3

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

Accepted Answer

A) more firms will enter the market. 
B) it will be unable to remain in business. 
C) the firm is a natural monopoly. 
D) the firm is able to earn only a normal profit. 
A) more firms will enter the market. 
B) it will be unable to remain in business. 
C) the firm is a natural monopoly. 
D) the firm is able to earn only a normal profit.

Question 4

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry, only to find that firms in the industry oppose this action.This is consistent with the

Accepted Answer

A) public interest theory of regulation. 
B) theory of natural monopolies. 
C) legal cartel theory of regulation. 
D) Alcoa and U.S.Steel court decisions. 
A) public interest theory of regulation. 
B) theory of natural monopolies. 
C) legal cartel theory of regulation. 
D) Alcoa and U.S.Steel court decisions.

Question 5

A function of the Federal Trade Commission is to

Accepted Answer

A) investigate instances of faulty and misleading advertising. 
B) establish railway rates for interstate railroads. 
C) ban or recall unsafe consumer products. 
D) prevent insider trading in securities markets. 
A) investigate instances of faulty and misleading advertising. 
B) establish railway rates for interstate railroads. 
C) ban or recall unsafe consumer products. 
D) prevent insider trading in securities markets.

Question 6

In which of the following sets of antitrust cases did the government gain convictions?

Accepted Answer

A) the U.S.Steel case and the Microsoft case 
B) the Alcoa case and the Microsoft case 
C) the DuPont cellophane case and the AT&T case 
D) the U.S.Steel case and the Alcoa case 
A) the U.S.Steel case and the Microsoft case 
B) the Alcoa case and the Microsoft case 
C) the DuPont cellophane case and the AT&T case 
D) the U.S.Steel case and the Alcoa case

Question 7

The Consumer Product Safety Commission engages in social regulation, rather than industrial regulation.

Accepted Answer

A) True 
 B)False

Question 8

Congressional representatives have called for extensive ergonomics regulations to reduce strains and injuries from repetitive activities by workers.Such regulation, if passed, would be a good example of

Accepted Answer

A) industrial regulation. 
B) the principal-agent problem. 
C) the free-rider problem. 
D) social regulation. 
A) industrial regulation. 
B) the principal-agent problem. 
C) the free-rider problem. 
D) social regulation.

Question 9

Suppose a court rules that the ABC Corporation is in violation of the antitrust laws because it produces 70 percent of the output of its industry.This decision is consistent with the

Accepted Answer

A) U.S.Steel case. 
B) Alcoa case. 
C) behavioralist approach to antitrust. 
D) legal cartel theory of regulation. 
A) U.S.Steel case. 
B) Alcoa case. 
C) behavioralist approach to antitrust. 
D) legal cartel theory of regulation.

Question 10

Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger.The U.S.Justice Department concludes the merger will boost the index to 5,500.The antitrust authorities will most likely

Accepted Answer

A) ignore this merger because of the relatively small increase in the Herfindahl index. 
B) allow the merger but watch the new firm carefully for future violations of the antitrust laws. 
C) allow the merger if foreign entry to the industry is possible. 
D) prevent the merger, contending that it violates the Clayton Act. 
A) ignore this merger because of the relatively small increase in the Herfindahl index. 
B) allow the merger but watch the new firm carefully for future violations of the antitrust laws. 
C) allow the merger if foreign entry to the industry is possible. 
D) prevent the merger, contending that it violates the Clayton Act.

Question 11

A merger of several firms operating in different industries-for example, a trucking company, a fast-food chain, and a brokerage house-is called

Accepted Answer

A) an integrated merger. 
B) a conglomerate merger. 
C) a vertical merger. 
D) a horizontal merger. 
A) an integrated merger. 
B) a conglomerate merger. 
C) a vertical merger. 
D) a horizontal merger.

Question 12

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Accepted Answer

A) Competitive firms A, B, and C meet and agree to charge a common price. 
B) Competitive firms D and E, each with 35 percent market shares, merge into a single firm. 
C) Competitive firms F and G independently charge lower prices to frequent customers than to occasional customers. 
D) Large dominant firm H forces buyers to purchase its product X in order to buy its popular product Y. 
A) Competitive firms A, B, and C meet and agree to charge a common price. 
B) Competitive firms D and E, each with 35 percent market shares, merge into a single firm. 
C) Competitive firms F and G independently charge lower prices to frequent customers than to occasional customers. 
D) Large dominant firm H forces buyers to purchase its product X in order to buy its popular product Y.

Question 13

Laws and government actions designed to prevent monopoly and to promote competition are the focus of

Accepted Answer

A) social regulation. 
B) industrial regulation. 
C) antitrust policy. 
D) incomes policy. 
A) social regulation. 
B) industrial regulation. 
C) antitrust policy. 
D) incomes policy.

Question 14

The administrative agency charged with enforcing the provisions of the Clayton Act (1914) was established by additional legislation in the same year.This legislation was the

Accepted Answer

A) Celler-Kefauver Act. 
B) Wheeler-Lea Act. 
C) Sherman Act. 
D) Federal Trade Commission Act. 
A) Celler-Kefauver Act. 
B) Wheeler-Lea Act. 
C) Sherman Act. 
D) Federal Trade Commission Act.

Question 15

The Clayton Act of 1914

Accepted Answer

A) outlawed price discrimination, tying contracts, acquisition of stocks of competing corporations, and interlocking directorates that lessen competition. 
B) prohibited unfair or deceptive acts or practices in commerce that tend to reduce competition. 
C) outlawed vertical and conglomerate mergers. 
D) prohibited one firm from acquiring the assets of another when the effect was to limit competition. 
A) outlawed price discrimination, tying contracts, acquisition of stocks of competing corporations, and interlocking directorates that lessen competition. 
B) prohibited unfair or deceptive acts or practices in commerce that tend to reduce competition. 
C) outlawed vertical and conglomerate mergers. 
D) prohibited one firm from acquiring the assets of another when the effect was to limit competition.

Question 16

The agency responsible for investigating instances of fraudulent or misleading advertising is the

Accepted Answer

A) Federal Trade Commission. 
B) Interstate Commerce Commission. 
C) Federal Communications Commission. 
D) Uniform Business Practices Commission. 
A) Federal Trade Commission. 
B) Interstate Commerce Commission. 
C) Federal Communications Commission. 
D) Uniform Business Practices Commission.

Question 17

In which of the following cases was the firm found not guilty of violating the Sherman Act?

Accepted Answer

A) Standard Oil case 
B) Microsoft case 
C) Alcoa case 
D) DuPont cellophane case 
A) Standard Oil case 
B) Microsoft case 
C) Alcoa case 
D) DuPont cellophane case

Question 18

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Accepted Answer

A) Celler-Kefauver Act of 1950 
B) Wheeler-Lea Act of 1938 
C) Clayton Act of 1914 
D) Sherman Act of 1890 
A) Celler-Kefauver Act of 1950 
B) Wheeler-Lea Act of 1938 
C) Clayton Act of 1914 
D) Sherman Act of 1890

Question 19

The U.S.Steel case of 1920 and the Alcoa case of 1945 dealt with which antitrust question?

Accepted Answer

A) To what extent should firms be limited in buying plant and equipment from other firms? 
B) Should an industry be judged by its behavior or by its structure? 
C) Should the steel and aluminum industries be considered natural monopolies? 
D) Should mergers be permitted between firms in closely related industries? 
A) To what extent should firms be limited in buying plant and equipment from other firms? 
B) Should an industry be judged by its behavior or by its structure? 
C) Should the steel and aluminum industries be considered natural monopolies? 
D) Should mergers be permitted between firms in closely related industries?

Question 20

Tying contracts are illegal under the

Accepted Answer

A) Wagner Act of 1935. 
B) Clayton Act of 1914. 
C) FTC Act of 1914. 
D) Celler-Kefauver Act of 1950. 
A) Wagner Act of 1935. 
B) Clayton Act of 1914. 
C) FTC Act of 1914. 
D) Celler-Kefauver Act of 1950.

Exam 21: Antitrust Policy and Regulation

The Celler-Kefauver Act of 1950

Which would be an example of public ownership as a response to natural monopolies?

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry, only to find that firms in the industry oppose this action.This is consistent with the

A function of the Federal Trade Commission is to

In which of the following sets of antitrust cases did the government gain convictions?

The Consumer Product Safety Commission engages in social regulation, rather than industrial regulation.

Congressional representatives have called for extensive ergonomics regulations to reduce strains and injuries from repetitive activities by workers.Such regulation, if passed, would be a good example of

Suppose a court rules that the ABC Corporation is in violation of the antitrust laws because it produces 70 percent of the output of its industry.This decision is consistent with the

Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger.The U.S.Justice Department concludes the merger will boost the index to 5,500.The antitrust authorities will most likely

A merger of several firms operating in different industries-for example, a trucking company, a fast-food chain, and a brokerage house-is called

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Laws and government actions designed to prevent monopoly and to promote competition are the focus of

The administrative agency charged with enforcing the provisions of the Clayton Act (1914) was established by additional legislation in the same year.This legislation was the

The Clayton Act of 1914

The agency responsible for investigating instances of fraudulent or misleading advertising is the

In which of the following cases was the firm found not guilty of violating the Sherman Act?

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

The U.S.Steel case of 1920 and the Alcoa case of 1945 dealt with which antitrust question?

Tying contracts are illegal under the

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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