Question 1

A 2000 ruling by a Federal court found that Microsoft, with its very popular Windows operating system,

Accepted Answer

A) controlled 95 percent of the PC operating system market and thus was an illegal monopoly. 
B) used anticompetitive practices to maintain and broaden its monopoly power. 
C) illegally lobbied members of Congress to obtain monopoly patents. 
D) conspired to fix prices on its Windows software. 
A) controlled 95 percent of the PC operating system market and thus was an illegal monopoly. 
B) used anticompetitive practices to maintain and broaden its monopoly power. 
C) illegally lobbied members of Congress to obtain monopoly patents. 
D) conspired to fix prices on its Windows software.

Question 2

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 3

Which of the following is directly illegal under the Sherman Act?

Accepted Answer

A) price discrimination 
B) tying contracts 
C) price-fixing 
D) interlocking directorates 
A) price discrimination 
B) tying contracts 
C) price-fixing 
D) interlocking directorates

Question 4

Social regulation

Accepted Answer

A) was developed as a substitute for industrial regulation. 
B) has declined in importance in recent years. 
C) applies more broadly and affects more people than industrial regulation. 
D) is more concerned with the overall standard of living of society rather than with details of production processes. 
A) was developed as a substitute for industrial regulation. 
B) has declined in importance in recent years. 
C) applies more broadly and affects more people than industrial regulation. 
D) is more concerned with the overall standard of living of society rather than with details of production processes.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Describe the three types of mergers and give real-world examples.

Accepted Answer

A horizontal merger occurs between two c

Question 7

Tying contracts, which are prohibited under the Clayton Act, refers to the situation where a producer requires that a buyer

Accepted Answer

A) can resell the product but only at a higher price than the original purchase price. 
B) cannot buy a similar product from other producers if that buyer wants to continue buying its product. 
C) buy another of its products as a condition for buying the desired product. 
D) cannot ever resell the product bought. 
A) can resell the product but only at a higher price than the original purchase price. 
B) cannot buy a similar product from other producers if that buyer wants to continue buying its product. 
C) buy another of its products as a condition for buying the desired product. 
D) cannot ever resell the product bought.

Question 8

The public interest theory of regulation stipulates that government regulation of a natural monopoly is necessary in order to achieve all of the following, except

Accepted Answer

A) preventing the natural monopoly from harming society through its monopoly pricing. 
B) garnering for society at least part of the cost reductions from being a natural monopoly. 
C) avoiding the reduction in output associated with monopoly power. 
D) eventually breaking up the monopoly to achieve competition within the industry. 
A) preventing the natural monopoly from harming society through its monopoly pricing. 
B) garnering for society at least part of the cost reductions from being a natural monopoly. 
C) avoiding the reduction in output associated with monopoly power. 
D) eventually breaking up the monopoly to achieve competition within the industry.

Question 9

The Sherman Act of 1890 outlawed

Accepted Answer

A) monopoly pricing and foreign trade. 
B) price discrimination and monopoly profits. 
C) restraint of trade and monopolization. 
D) foreign trade and monopolization. 
A) monopoly pricing and foreign trade. 
B) price discrimination and monopoly profits. 
C) restraint of trade and monopolization. 
D) foreign trade and monopolization.

Question 10

The basic purpose of antitrust laws is to

Accepted Answer

A) provide subsidies for American business. 
B) limit monopoly power in industry. 
C) control prices to protect consumers. 
D) enforcelaws that restrict competition. 
A) provide subsidies for American business. 
B) limit monopoly power in industry. 
C) control prices to protect consumers. 
D) enforcelaws that restrict competition.

Question 11

Which of the following is most likely to be a natural monopoly?

Accepted Answer

A) aircraft manufacturing 
B) auto manufacturing 
C) electric utilities 
D) steel production 
A) aircraft manufacturing 
B) auto manufacturing 
C) electric utilities 
D) steel production

Question 12

In recent years, the strictest application of antitrust laws has been for

Accepted Answer

A) breaking up firms with monopoly power. 
B) prosecuting firms for price-fixing activity. 
C) blocking vertical mergers. 
D) limiting foreign competition. 
A) breaking up firms with monopoly power. 
B) prosecuting firms for price-fixing activity. 
C) blocking vertical mergers. 
D) limiting foreign competition.

Question 13

A merger between a maker of household detergents and a fast-food chain would be an example of

Accepted Answer

A) a horizontal merger. 
B) an interlocking directorate. 
C) a conglomerate merger. 
D) a tying contract. 
A) a horizontal merger. 
B) an interlocking directorate. 
C) a conglomerate merger. 
D) a tying contract.

Question 14

The U.S. Justice Department, the Federal Trade Commission, state attorneys general, and injured private parties can independently file charges against firms under the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 15

Using the Internet, some firms are now employing software that uses pricing algorithms to constantly adjust their online prices in response to what rivals are charging for similar products. This is making it easier for the

Accepted Answer

A) firms to collude tacitly in their pricing schemes. 
B) government to prove price-fixing. 
C) firms to gain monopoly power over their rivals. 
D) government to enforce industrial regulation. 
A) firms to collude tacitly in their pricing schemes. 
B) government to prove price-fixing. 
C) firms to gain monopoly power over their rivals. 
D) government to enforce industrial regulation.

Question 16

Government regulation of firms' prices or "rates" in selected industries is 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 17

In the U.S. Steel case of 1920, the courts held that

Accepted Answer

A) the structure of an industry is more important than its behavior in determining violations of the antitrust laws. 
B) any firm that faces substantial import competition is exempt from the antitrust laws. 
C) although U.S. Steel possessed monopoly power, it had not violated the Sherman Act because it had not unreasonably used that power. 
D) the fact that U.S. Steel possessed monopoly power was a violation of the Sherman Act. 
A) the structure of an industry is more important than its behavior in determining violations of the antitrust laws. 
B) any firm that faces substantial import competition is exempt from the antitrust laws. 
C) although U.S. Steel possessed monopoly power, it had not violated the Sherman Act because it had not unreasonably used that power. 
D) the fact that U.S. Steel possessed monopoly power was a violation of the Sherman Act.

Question 18

Describe the Wheeler-Lea Act of 1938 and name the company and the amount of that company's fine for their 2016 violation of this act.

Accepted Answer

The Wheeler-Lea Act of 1938 amended the

Question 19

Which of the following is mainly involved in social regulation?

Accepted Answer

A) the Social Security Administration 
B) the Federal Communications Commission 
C) the Food and Drug Administration 
D) the Interstate Commerce Commission 
A) the Social Security Administration 
B) the Federal Communications Commission 
C) the Food and Drug Administration 
D) the Interstate Commerce Commission

Question 20

What is social regulation? As a federal social agency, what is the jurisdiction of the Food and Drug Administration (FDA)?

Accepted Answer

Social regulation is government regulati

Exam 21: Antitrust Policy and Regulation

A 2000 ruling by a Federal court found that Microsoft, with its very popular Windows operating system,

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

Which of the following is directly illegal under the Sherman Act?

Social regulation

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

Describe the three types of mergers and give real-world examples.

Tying contracts, which are prohibited under the Clayton Act, refers to the situation where a producer requires that a buyer

The public interest theory of regulation stipulates that government regulation of a natural monopoly is necessary in order to achieve all of the following, except

The Sherman Act of 1890 outlawed

The basic purpose of antitrust laws is to

Which of the following is most likely to be a natural monopoly?

In recent years, the strictest application of antitrust laws has been for

A merger between a maker of household detergents and a fast-food chain would be an example of

The U.S. Justice Department, the Federal Trade Commission, state attorneys general, and injured private parties can independently file charges against firms under the Sherman Act.

Using the Internet, some firms are now employing software that uses pricing algorithms to constantly adjust their online prices in response to what rivals are charging for similar products. This is making it easier for the

Government regulation of firms' prices or "rates" in selected industries is the focus of

In the U.S. Steel case of 1920, the courts held that

Describe the Wheeler-Lea Act of 1938 and name the company and the amount of that company's fine for their 2016 violation of this act.

Which of the following is mainly involved in social regulation?

What is social regulation? As a federal social agency, what is the jurisdiction of the Food and Drug Administration (FDA)?

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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