Question 1

What is industrial regulation? As a federal regulatory commission, what is the jurisdiction of the Federal Communications Commission (FCC)?

Accepted Answer

Industrial regulation, or public regulat

Question 2

Industrial regulation generally applies in cases where

Accepted Answer

A) society would benefit if a monopoly is prevented from evolving in a certain market. 
B) a monopoly already exists, and the government believes that society would benefit if it is dissolved. 
C) there is an economic reason for an industry to be organized as a monopoly. 
D) foreign competition in the form of imports is prevalent in the market. 
A) society would benefit if a monopoly is prevented from evolving in a certain market. 
B) a monopoly already exists, and the government believes that society would benefit if it is dissolved. 
C) there is an economic reason for an industry to be organized as a monopoly. 
D) foreign competition in the form of imports is prevalent in the market.

Question 3

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 4

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. The government would be most likely to challenge a merger between

Accepted Answer

A) Firm 1 in Alpha and Firm 6 in Delta. 
B) Firms 3 and 4 in Beta. 
C) Firms 1 and 2 in Kappa. 
D) Firm 4 in Alpha and Firm 3 in Kappa. 
A) Firm 1 in Alpha and Firm 6 in Delta. 
B) Firms 3 and 4 in Beta. 
C) Firms 1 and 2 in Kappa. 
D) Firm 4 in Alpha and Firm 3 in Kappa.

Question 5

Differences in the interpretation and the enforcement of antitrust laws are in part rooted on the issue of focus. One such issue pertains to the question of whether the policy focus should be on

Accepted Answer

A) domestic firms versus multinationals. 
B) intrastate trade versus interstate trade. 
C) monopoly output versus monopoly pricing 
D) monopoly behavior versus monopoly structure. 
A) domestic firms versus multinationals. 
B) intrastate trade versus interstate trade. 
C) monopoly output versus monopoly pricing 
D) monopoly behavior versus monopoly structure.

Question 6

The legislation that prohibited "every contract . . . or conspiracy, in restraint of trade and commerce" is the

Accepted Answer

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

Question 7

Differences in the application of antitrust laws are in part rooted on the issue of how broadly antitrust authorities should define the relevant

Accepted Answer

A) market. 
B) product. 
C) price. 
D) firm. 
A) market. 
B) product. 
C) price. 
D) firm.

Question 8

Briefly describe the historical background that gave rise to antitrust laws and regulation in the United States.

Accepted Answer

Just after the U.S. Civil War (1861-1865

Question 9

Interlocking directorates are

Accepted Answer

A) legal if the two firms have small market shares. 
B) illegal under provisions of the Federal Trade Commission Act of 1914. 
C) illegal under provisions of the Celler-Kefauver Act of 1950. 
D) illegal under provisions of the Clayton Act of 1914. 
A) legal if the two firms have small market shares. 
B) illegal under provisions of the Federal Trade Commission Act of 1914. 
C) illegal under provisions of the Celler-Kefauver Act of 1950. 
D) illegal under provisions of the Clayton Act of 1914.

Question 10

The Sherman Act

Accepted Answer

A) was declared unconstitutional in 1895. 
B) provided for government regulation of the railroads. 
C) declared monopoly and restraints of trade to be illegal. 
D) exempted the railroad and communications industries from the antitrust laws. 
A) was declared unconstitutional in 1895. 
B) provided for government regulation of the railroads. 
C) declared monopoly and restraints of trade to be illegal. 
D) exempted the railroad and communications industries from the antitrust laws.

Question 11

According to the legal cartel theory of regulation, firms desire to have government regulation because it protects them from competition.

Accepted Answer

A) True 
 B)False

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

Which one of the following is most likely to increase the Herfindahl index of a particular industry?

Accepted Answer

A) a conglomerate merger 
B) a vertical merger 
C) a price-fixing arrangement among all the industry firms 
D) a horizontal merger 
A) a conglomerate merger 
B) a vertical merger 
C) a price-fixing arrangement among all the industry firms 
D) a horizontal merger

Question 14

Describe the importance and major features of the Sherman Act of 1890.

Accepted Answer

The public resentment of trusts that eme

Question 15

Which is the most valid criticism of the regulation of natural monopolies and other firms subject to regulation by regulatory commissions?

Accepted Answer

A) It is difficult to find enough honest people to serve on regulatory commissions. 
B) Such regulation is unnecessary and amounts to creeping socialism. 
C) Many members of such commissions are appointed rather than being elected. 
D) Regulated firms may have little incentive to contain costs since they are assured a "fair" return above costs. 
A) It is difficult to find enough honest people to serve on regulatory commissions. 
B) Such regulation is unnecessary and amounts to creeping socialism. 
C) Many members of such commissions are appointed rather than being elected. 
D) Regulated firms may have little incentive to contain costs since they are assured a "fair" return above costs.

Question 16

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. Those who focus on monopoly structure would most likely assert that there is a violation of antitrust law in which industry?

Accepted Answer

A) Alpha 
B) Beta 
C) Kappa 
D) Delta 
A) Alpha 
B) Beta 
C) Kappa 
D) Delta

Question 17

If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct. This situation would be an example of

Accepted Answer

A) the rule of reason. 
B) a cease-and-desist order. 
C) a per se violation. 
D) tying contracts. 
A) the rule of reason. 
B) a cease-and-desist order. 
C) a per se violation. 
D) tying contracts.

Question 18

The argument that a large firm dominating an industry will not necessarily act like a monopolist, as expressed in the 1920 U.S. Steel case, suggests that the application of antitrust laws should be based on firm

Accepted Answer

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

Question 19

The main purpose of industrial regulation is to

Accepted Answer

A) lower price to marginal cost. 
B) lower price to average total cost such that the firm earns a fair return. 
C) break monopolies into competing firms. 
D) reduce X-inefficiency. 
A) lower price to marginal cost. 
B) lower price to average total cost such that the firm earns a fair return. 
C) break monopolies into competing firms. 
D) reduce X-inefficiency.

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

What is industrial regulation? As a federal regulatory commission, what is the jurisdiction of the Federal Communications Commission (FCC)?

Industrial regulation generally applies in cases where

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

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. The government would be most likely to challenge a merger between

Differences in the interpretation and the enforcement of antitrust laws are in part rooted on the issue of focus. One such issue pertains to the question of whether the policy focus should be on

The legislation that prohibited "every contract . . . or conspiracy, in restraint of trade and commerce" is the

Differences in the application of antitrust laws are in part rooted on the issue of how broadly antitrust authorities should define the relevant

Briefly describe the historical background that gave rise to antitrust laws and regulation in the United States.

Interlocking directorates are

The Sherman Act

According to the legal cartel theory of regulation, firms desire to have government regulation because it protects them from competition.

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

Which one of the following is most likely to increase the Herfindahl index of a particular industry?

Describe the importance and major features of the Sherman Act of 1890.

Which is the most valid criticism of the regulation of natural monopolies and other firms subject to regulation by regulatory commissions?

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. Those who focus on monopoly structure would most likely assert that there is a violation of antitrust law in which industry?

If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct. This situation would be an example of

The argument that a large firm dominating an industry will not necessarily act like a monopolist, as expressed in the 1920 U.S. Steel case, suggests that the application of antitrust laws should be based on firm

The main purpose of industrial regulation is to

Tying contracts are illegal under the

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

Filters