Question 1

One goal of rate-of-return regulation is the prevention of

Accepted Answer

A)  free market entry. 
B)  positive economic profits. 
C)  poor quality service. 
D)  environmental degradation. 
A)  free market entry. 
B)  positive economic profits. 
C)  poor quality service. 
D)  environmental degradation.

Question 2

The primary purpose of economic regulation of an industry is to

Accepted Answer

A)  control the prices charged by the regulated industry. 
B)  increase taxes across the board. 
C)  reduce output. 
D)  control hiring and firing within the industry. 
A)  control the prices charged by the regulated industry. 
B)  increase taxes across the board. 
C)  reduce output. 
D)  control hiring and firing within the industry.

Question 3

The cost of complying with regulation

Accepted Answer

A)  shifts the ATC curve upward. 
B)  shifts the MC curve downward. 
C)  shifts the demand curve to the right. 
D)  increases the products' price elasticity of demand. 
A)  shifts the ATC curve upward. 
B)  shifts the MC curve downward. 
C)  shifts the demand curve to the right. 
D)  increases the products' price elasticity of demand.

Question 4

There are many exemptions from antitrust laws. Which of the following is NOT one of them?

Accepted Answer

A)  labor unions 
B)  public utilities 
C)  hospitals 
D)  publishers 
A)  labor unions 
B)  public utilities 
C)  hospitals 
D)  publishers

Question 5

-In the above figure, if this natural monopolist were unregulated, the profit maximizing firm would produce

Accepted Answer

A)  at Q1 output rate. 
B)  at Q2 output rate. 
C)  at Q3 output rate. 
D)  past the Q3 output rate. 
A)  at Q1 output rate. 
B)  at Q2 output rate. 
C)  at Q3 output rate. 
D)  past the Q3 output rate.

Question 6

-Refer to the above figure. From the standpoint of society, the optimal price is

Accepted Answer

A)  P1 
B)  P2 
C)  P3 
D)  P5 
A)  P1 
B)  P2 
C)  P3 
D)  P5

Question 7

What is the difference between holding a monopoly and monopolization? Which is illegal? Explain.

Accepted Answer

Monopolization involves having a monopol

Question 8

Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as

Accepted Answer

A)  average cost regulation. 
B)  marginal cost regulation. 
C)  rate-of-return regulation. 
D)  cost-of-service regulation. 
A)  average cost regulation. 
B)  marginal cost regulation. 
C)  rate-of-return regulation. 
D)  cost-of-service regulation.

Question 9

The total cost of federal regulation includes

Accepted Answer

A)  the funding of government agencies overseeing compliance, the compliance cost for the regulated firms, and the opportunity cost of regulation for the firms. 
B)  the funding of government agencies overseeing compliance less the compliance cost for the regulated firms and the opportunity cost of regulation for the firms. 
C)  only the cost of compliance by the regulated firms. 
D)  only the funding of the regulatory agencies. 
A)  the funding of government agencies overseeing compliance, the compliance cost for the regulated firms, and the opportunity cost of regulation for the firms. 
B)  the funding of government agencies overseeing compliance less the compliance cost for the regulated firms and the opportunity cost of regulation for the firms. 
C)  only the cost of compliance by the regulated firms. 
D)  only the funding of the regulatory agencies.

Exam 27: Regulation and Antitrust Policy in a Globalized Economy

One goal of rate-of-return regulation is the prevention of

The primary purpose of economic regulation of an industry is to

The cost of complying with regulation

There are many exemptions from antitrust laws. Which of the following is NOT one of them?

-In the above figure, if this natural monopolist were unregulated, the profit maximizing firm would produce

-Refer to the above figure. From the standpoint of society, the optimal price is

What is the difference between holding a monopoly and monopolization? Which is illegal? Explain.

Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as

The total cost of federal regulation includes

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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