Question 1

The antitrust laws are enforced by the

Accepted Answer

A) Federal Bureau of Investigation. 
B) Antimonopoly Court of Appeals. 
C) Federal Justice Department and the Federal Trade Commission. 
D) Department of Commerce. 
A) Federal Bureau of Investigation. 
B) Antimonopoly Court of Appeals. 
C) Federal Justice Department and the Federal Trade Commission. 
D) Department of Commerce.

Question 2

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 1 in Alpha and Firm 2 in Delta would be a

Accepted Answer

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

Question 3

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Accepted Answer

A) True 
 B)False

Question 4

The Celler-Kefauver Act outlawed interlocking directorates.

Accepted Answer

A) True 
 B)False

Question 5

The degree of strictness in the enforcement of antitrust laws often depends on

Accepted Answer

A) political appointments. 
B) the rule of reason. 
C) use of the Herfindahl index. 
D) per se violations. 
A) political appointments. 
B) the rule of reason. 
C) use of the Herfindahl index. 
D) per se violations.

Question 6

The so-called rule of reason in interpreting antitrust legislation suggests that the application of antitrust laws should be based on industry

Accepted Answer

A) efficiency. 
B) concentration ratios. 
C) behavior. 
D) structure. 
A) efficiency. 
B) concentration ratios. 
C) behavior. 
D) structure.

Question 7

The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too little capital in the production process.

Accepted Answer

A) True 
 B)False

Question 8

Dominant firms that formed in several industries in the U.S. in the 1870s and 1880s, which assigned control to a single decision group, were referred to as

Accepted Answer

A) trusts. 
B) mergers. 
C) tying contracts. 
D) single-seller monopoly. 
A) trusts. 
B) mergers. 
C) tying contracts. 
D) single-seller monopoly.

Question 9

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation)except the

Accepted Answer

A) Food and Drug Administration. 
B) Federal Energy Regulatory Commission. 
C) Federal Communications Commission. 
D) 50 state public utility commissions. 
A) Food and Drug Administration. 
B) Federal Energy Regulatory Commission. 
C) Federal Communications Commission. 
D) 50 state public utility commissions.

Question 10

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 11

Unfair advertising practices are investigated by the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 12

A labor market application of the legal cartel theory of regulation would be

Accepted Answer

A) unemployment benefits. 
B) the Full Employment Act. 
C) Equal Employment Opportunities provisions. 
D) occupational licensing. 
A) unemployment benefits. 
B) the Full Employment Act. 
C) Equal Employment Opportunities provisions. 
D) occupational licensing.

Question 13

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 14

An example of a horizontal merger is one between an airline and

Accepted Answer

A) a chain of hotels. 
B) another airline. 
C) an aluminum company. 
D) a car rental company. 
A) a chain of hotels. 
B) another airline. 
C) an aluminum company. 
D) a car rental company.

Question 15

In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil

Accepted Answer

A) guilty of tax evasion for merger activity. 
B) not guilty of tax evasion for merger activity. 
C) guilty of monopolizing the petroleum industry. 
D) not guilty of monopolizing the petroleum industry. 
A) guilty of tax evasion for merger activity. 
B) not guilty of tax evasion for merger activity. 
C) guilty of monopolizing the petroleum industry. 
D) not guilty of monopolizing the petroleum industry.

Question 16

Social regulation consists of regulating the behavior of people in society in order to promote the safety and harmony in neighborhoods.

Accepted Answer

A) True 
 B)False

Question 17

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 18

A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company.

Accepted Answer

A) True 
 B)False

Question 19

In antitrust law, "price-fixing" refers to

Accepted Answer

A) the government fixing the prices of products of antitrust violators. 
B) a company fixing the price of its own product regardless of the degree of competition. 
C) competitors colluding to set their prices collectively. 
D) a company paying its suppliers a fixed price for certain inputs. 
A) the government fixing the prices of products of antitrust violators. 
B) a company fixing the price of its own product regardless of the degree of competition. 
C) competitors colluding to set their prices collectively. 
D) a company paying its suppliers a fixed price for certain inputs.

Question 20

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 2 in Alpha and Firm 3 in Beta would be a

Accepted Answer

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

Exam 21: Antitrust Policy and Regulation

The antitrust laws are enforced by the

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 1 in Alpha and Firm 2 in Delta would be a

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

The Celler-Kefauver Act outlawed interlocking directorates.

The degree of strictness in the enforcement of antitrust laws often depends on

The so-called rule of reason in interpreting antitrust legislation suggests that the application of antitrust laws should be based on industry

The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too little capital in the production process.

Dominant firms that formed in several industries in the U.S. in the 1870s and 1880s, which assigned control to a single decision group, were referred to as

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation)except the

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

Unfair advertising practices are investigated by the Federal Trade Commission.

A labor market application of the legal cartel theory of regulation would be

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

An example of a horizontal merger is one between an airline and

In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil

Social regulation consists of regulating the behavior of people in society in order to promote the safety and harmony in neighborhoods.

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

A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company.

In antitrust law, "price-fixing" refers to

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 2 in Alpha and Firm 3 in Beta would be a

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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