Question 1

An example of a government organization involved primarily in public regulation or industrial regulation of natural monopolies would be the

Accepted Answer

A) Food and Drug Administration. 
B) Environmental Protection Agency. 
C) Federal Energy Regulatory Commission. 
D) Occupational Safety and Health Administration. 
A) Food and Drug Administration. 
B) Environmental Protection Agency. 
C) Federal Energy Regulatory Commission. 
D) Occupational Safety and Health Administration.

Question 2

The Federal Trade Commission

Accepted Answer

A) is empowered to hold public hearings to investigate unfair practices. 
B) prohibits interlocking directorates in interstate industries. 
C) regulates airline fares. 
D) regulates such transportation industries as railroads and trucking. 
A) is empowered to hold public hearings to investigate unfair practices. 
B) prohibits interlocking directorates in interstate industries. 
C) regulates airline fares. 
D) regulates such transportation industries as railroads and trucking.

Question 3

In 2000, Microsoft was fined $2.7 billion for

Accepted Answer

A) using anticompetitive means to promote its Internet Explorer web browser. 
B) monopolizing the market for word processing software. 
C) conspiring with Netscape and Sun to monopolize the market for Internet browsers. 
D) deliberately pricing Windows 95 and 98 below marginal cost to monopolize the market for operating systems for personal computers. 
A) using anticompetitive means to promote its Internet Explorer web browser. 
B) monopolizing the market for word processing software. 
C) conspiring with Netscape and Sun to monopolize the market for Internet browsers. 
D) deliberately pricing Windows 95 and 98 below marginal cost to monopolize the market for operating systems for personal computers.

Question 4

The cornerstone of antitrust legislation in the U.S. is the

Accepted Answer

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

Question 5

Tying agreements are contracts by which retailers agree to charge the prices that manufacturers set on branded goods.

Accepted Answer

A) True 
 B)False

Question 6

Which legislative act provided for the industrial regulation of the railroad industry by the Federal government?

Accepted Answer

A) Interstate Commerce Act 
B) Railway Labor Act 
C) Sherman Act 
D) Clayton Act 
A) Interstate Commerce Act 
B) Railway Labor Act 
C) Sherman Act 
D) Clayton Act

Question 7

How did the Clayton Act of 1914 strengthen and clarify the intent of the Sherman Act of 1890?

Accepted Answer

The Clayton Act of 1914 elabor

Question 8

An industry has five firms, each with a market share of 20 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in the industry seek to merge, this action would most likely be opposed by the government because the Herfindahl index for the industry is

Accepted Answer

A) 2,000 and the merger would increase the index by 500. 
B) 2,000 and the merger would increase the index by 800. 
C) 2,500 and the merger would increase the index by 500. 
D) 2,500 and the merger would increase the index by 1,200. 
A) 2,000 and the merger would increase the index by 500. 
B) 2,000 and the merger would increase the index by 800. 
C) 2,500 and the merger would increase the index by 500. 
D) 2,500 and the merger would increase the index by 1,200.

Question 9

"Behavioralists" in antitrust applications believe that a firm that dominates a market is not necessarily behaving unfairly.

Accepted Answer

A) True 
 B)False

Question 10

The government was successful in gaining an antitrust conviction in the

Accepted Answer

A) U.S. Steel case. 
B) IBM case. 
C) Alcoa case. 
D) DuPont cellophane case. 
A) U.S. Steel case. 
B) IBM case. 
C) Alcoa case. 
D) DuPont cellophane case.

Question 11

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 12

A merger between McDonald's and Burger King would be an example of a

Accepted Answer

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

Question 13

Using antitrust law to split up an unregulated natural monopoly into several competing firms

Accepted Answer

A) would reduce product price. 
B) would increase product price. 
C) might either increase product price or reduce product price. 
D) would reduce average total cost. 
A) would reduce product price. 
B) would increase product price. 
C) might either increase product price or reduce product price. 
D) would reduce average total cost.

Question 14

Those who may file antitrust lawsuits against violators of the Sherman Act include the following, except

Accepted Answer

A) injured private parties. 
B) state attorneys general. 
C) the U.S. Department of Labor. 
D) the U.S. Department of Justice. 
A) injured private parties. 
B) state attorneys general. 
C) the U.S. Department of Labor. 
D) the U.S. Department of Justice.

Question 15

The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a

Accepted Answer

A) dominant firm oligopoly. 
B) structured market. 
C) natural monopoly. 
D) trust. 
A) dominant firm oligopoly. 
B) structured market. 
C) natural monopoly. 
D) trust.

Question 16

How do economists view the overall effectiveness of antitrust policy?

Accepted Answer

Most economists conclude that, overall,

Question 17

Which act sharpened and clarified the provisions of the Sherman Act and sought to outlaw the techniques that firms might use to gain monopoly power?

Accepted Answer

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

Question 18

Which of the following is not a true statement about how social regulation differs from industrial regulation?

Accepted Answer

A) Social regulation applies to many industries across the board, whereas industrial regulation is more specific to one industry. 
B) Social regulation intrudes into the day-to-day production processes of companies more so than industrial regulation. 
C) Social regulation is enforced by state and local governments, whereas industrial regulation tends to be the domain of the federal government. 
D) Social regulation has expanded rapidly during the same period in which industrial regulation has waned. 
A) Social regulation applies to many industries across the board, whereas industrial regulation is more specific to one industry. 
B) Social regulation intrudes into the day-to-day production processes of companies more so than industrial regulation. 
C) Social regulation is enforced by state and local governments, whereas industrial regulation tends to be the domain of the federal government. 
D) Social regulation has expanded rapidly during the same period in which industrial regulation has waned.

Question 19

Regulation of business, according to the legal cartel theory, stems from

Accepted Answer

A) the public wanting protection from potentially capricious firms. 
B) economists who see greater efficiency in regulated industries. 
C) lawyers whose jobs are more secure in cartels. 
D) firms wanting to be regulated in order to shut off competition. 
A) the public wanting protection from potentially capricious firms. 
B) economists who see greater efficiency in regulated industries. 
C) lawyers whose jobs are more secure in cartels. 
D) firms wanting to be regulated in order to shut off competition.

Question 20

The public interest theory of industrial regulation contends that

Accepted Answer

A) while industrial regulation is sound in theory, bureaucrats allow monopolists to obtain excessive profits. 
B) regulated monopolies are tantamount to legal cartels. 
C) the objective of regulation is to protect the public from the market power inherent in natural monopolies. 
D) firms in some industries want to be regulated. 
A) while industrial regulation is sound in theory, bureaucrats allow monopolists to obtain excessive profits. 
B) regulated monopolies are tantamount to legal cartels. 
C) the objective of regulation is to protect the public from the market power inherent in natural monopolies. 
D) firms in some industries want to be regulated.

Exam 21: Antitrust Policy and Regulation

An example of a government organization involved primarily in public regulation or industrial regulation of natural monopolies would be the

The Federal Trade Commission

In 2000, Microsoft was fined $2.7 billion for

The cornerstone of antitrust legislation in the U.S. is the

Tying agreements are contracts by which retailers agree to charge the prices that manufacturers set on branded goods.

Which legislative act provided for the industrial regulation of the railroad industry by the Federal government?

How did the Clayton Act of 1914 strengthen and clarify the intent of the Sherman Act of 1890?

"Behavioralists" in antitrust applications believe that a firm that dominates a market is not necessarily behaving unfairly.

The government was successful in gaining an antitrust conviction in the

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

A merger between McDonald's and Burger King would be an example of a

Using antitrust law to split up an unregulated natural monopoly into several competing firms

Those who may file antitrust lawsuits against violators of the Sherman Act include the following, except

The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a

How do economists view the overall effectiveness of antitrust policy?

Which act sharpened and clarified the provisions of the Sherman Act and sought to outlaw the techniques that firms might use to gain monopoly power?

Which of the following is not a true statement about how social regulation differs from industrial regulation?

Regulation of business, according to the legal cartel theory, stems from

The public interest theory of industrial regulation contends that

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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