Question 1

The optimal amount of social regulation occurs where the marginal benefit of such regulation:

Accepted Answer

A)  equals the marginal cost. 
B)  exceeds the marginal cost by the greatest amount. 
C)  is zero. 
D)  is at its maximum. 
A)  equals the marginal cost. 
B)  exceeds the marginal cost by the greatest amount. 
C)  is zero. 
D)  is at its maximum.

Question 2

The Celler-Kefauver Act outlawed interlocking directorates.

Accepted Answer

A) True 
 B)False

Question 3

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 4

(Last Word)In 2001,Microsoft was found guilty of:

Accepted Answer

A)  using anticompetitive means to maintain and broaden its "Windows" monopoly. 
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 maintain and broaden its "Windows" monopoly. 
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 5

In which of the following sets of antitrust cases did the government gain convictions?

Accepted Answer

A)  The U.S.Steel case and the Microsoft case. 
B)  The Alcoa case and the Microsoft case. 
C)  The DuPont cellophane case and the AT&T case. 
D)  The U.S.Steel case and the Alcoa case. 
A)  The U.S.Steel case and the Microsoft case. 
B)  The Alcoa case and the Microsoft case. 
C)  The DuPont cellophane case and the AT&T case. 
D)  The U.S.Steel case and the Alcoa case.

Question 6

The view that the antitrust laws need to be strongly enforced to prevent illegal business behaviors,monopolization of markets,and allocative inefficiency is known as the:

Accepted Answer

A)  structuralist view of antitrust. 
B)  behavioralist view of antitrust. 
C)  laissez-faire perspective on antitrust. 
D)  active antitrust perspective. 
A)  structuralist view of antitrust. 
B)  behavioralist view of antitrust. 
C)  laissez-faire perspective on antitrust. 
D)  active antitrust perspective.

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

In the Alcoa case of 1945,the courts held that:

Accepted Answer

A)  the mere possession of monopoly power is a violation of the antitrust laws. 
B)  only contracts and combinations that unreasonably restrain trade are in violation of the Sherman Act. 
C)  retail and wholesale firms are exempt from antitrust legislation. 
D)  firms that sell more than one-half of their output overseas are exempt from antitrust. 
A)  the mere possession of monopoly power is a violation of the antitrust laws. 
B)  only contracts and combinations that unreasonably restrain trade are in violation of the Sherman Act. 
C)  retail and wholesale firms are exempt from antitrust legislation. 
D)  firms that sell more than one-half of their output overseas are exempt from antitrust.

Question 9

Social,as distinct from industrial,regulation is the major focus of the:

Accepted Answer

A)  Federal Trade Commission. 
B)  Federal Energy Regulatory Commission. 
C)  Federal Communications Commission. 
D)  Consumer Product Safety Commission. 
A)  Federal Trade Commission. 
B)  Federal Energy Regulatory Commission. 
C)  Federal Communications Commission. 
D)  Consumer Product Safety Commission.

Question 10

A conglomerate merger:

Accepted Answer

A)  can extend the line of products sold,extend the territories in which products are sold,or combine totally unrelated products. 
B)  is defined as a merger involving two firms that previously had a buyer-seller relationship. 
C)  is defined as a merger involving two firms producing the same or similar products and selling them in the same geographical market. 
D)  is illegal,per se. 
A)  can extend the line of products sold,extend the territories in which products are sold,or combine totally unrelated products. 
B)  is defined as a merger involving two firms that previously had a buyer-seller relationship. 
C)  is defined as a merger involving two firms producing the same or similar products and selling them in the same geographical market. 
D)  is illegal,per se.

Question 11

Suppose the firms in a five-firm industry have market shares of 30,30,20,10,and 10 percent,respectively.The Herfindahl index for the industry is:

Accepted Answer

A)  1,900. 
B)  2,400. 
C)  90. 
D)  10,000. 
A)  1,900. 
B)  2,400. 
C)  90. 
D)  10,000.

Question 12

(Consider This)The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving:

Accepted Answer

A)  monopolization. 
B)  tying contracts. 
C)  price-fixing. 
D)  horizontal mergers. 
A)  monopolization. 
B)  tying contracts. 
C)  price-fixing. 
D)  horizontal mergers.

Question 13

The Celler-Kefauver Act made vertical mergers legal,provided each firm does not have more than 30 percent of its relevant market.

Accepted Answer

A) True 
 B)False

Question 14

All of the following can file antitrust charges under the Sherman Act except:

Accepted Answer

A)  the U.S.Justice Department. 
B)  state attorneys general. 
C)  injured private parties. 
D)  the Federal Energy Regulatory Commission. 
A)  the U.S.Justice Department. 
B)  state attorneys general. 
C)  injured private parties. 
D)  the Federal Energy Regulatory Commission.

Question 15

Price-fixing:

Accepted Answer

A)  is prohibited by Section 7 of the Clayton Act. 
B)  is a per se violation of the antitrust laws. 
C)  may be either legal or illegal depending on whether or not it produces above-normal profits. 
D)  is illegal under terms of the Federal Trade Commission Act. 
A)  is prohibited by Section 7 of the Clayton Act. 
B)  is a per se violation of the antitrust laws. 
C)  may be either legal or illegal depending on whether or not it produces above-normal profits. 
D)  is illegal under terms of the Federal Trade Commission Act.

Question 16

Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger.The U.S.Justice Department concludes the merger will boost the index to 5,500.The antitrust authorities will most likely:

Accepted Answer

A)  ignore this merger because of the relatively small increase in the Herfindahl index. 
B)  allow the merger but watch the new firm carefully for future violations of the antitrust laws. 
C)  allow the merger if foreign entry to the industry is possible. 
D)  prevent the merger,contending that it violates the Clayton Act. 
A)  ignore this merger because of the relatively small increase in the Herfindahl index. 
B)  allow the merger but watch the new firm carefully for future violations of the antitrust laws. 
C)  allow the merger if foreign entry to the industry is possible. 
D)  prevent the merger,contending that it violates the Clayton Act.

Question 17

Conspiracies to fix prices are:

Accepted Answer

A)  illegal under the Clayton Act. 
B)  illegal under the Celler-Kefauver Act. 
C)  per se violations of the antitrust laws. 
D)  more tolerated by government today than two or three decades ago. 
A)  illegal under the Clayton Act. 
B)  illegal under the Celler-Kefauver Act. 
C)  per se violations of the antitrust laws. 
D)  more tolerated by government today than two or three decades ago.

Question 18

A firm charged with monopolizing a market is less likely to be convicted if:

Accepted Answer

A)  the court accepts a broad definition of the market. 
B)  the court accepts a narrow definition of the market. 
C)  it has gained its monopoly through abusive means. 
D)  it sells its product to other firms,rather than directly to consumers. 
A)  the court accepts a broad definition of the market. 
B)  the court accepts a narrow definition of the market. 
C)  it has gained its monopoly through abusive means. 
D)  it sells its product to other firms,rather than directly to consumers.

Question 19

Answer the question on the basis of the following table showing market shares of firms in hypothetical industries.Assume these are distinct industries with no buyer-seller relationships or competition among them. $\begin{array}{c}
&&\text { Market Share of Firms in Industry }
\end{array}$
$\begin{array}{c}
\begin{array}{lll}
\
Industry\
Alpha\
Beta\
Cappa\
Delta\
\end{array}
\begin{array}{lll}
\
1&2&3&4&5&6\
30&30&20&20&--&--\
80&10&5&3&1&1\
25&25&25&25&--&--\
20&20&20&20&10&10
\end{array}
\end{array}$ Refer to the table.The Herfindahl index for Cappa is:

Accepted Answer

A)  2,500. 
B)  100. 
C)  100,000. 
D)  5,000. 
A)  2,500. 
B)  100. 
C)  100,000. 
D)  5,000.

Question 20

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.

The optimal amount of social regulation occurs where the marginal benefit of such regulation:

The Celler-Kefauver Act outlawed interlocking directorates.

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

(Last Word)In 2001,Microsoft was found guilty of:

In which of the following sets of antitrust cases did the government gain convictions?

The view that the antitrust laws need to be strongly enforced to prevent illegal business behaviors,monopolization of markets,and allocative inefficiency is known as the:

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.

In the Alcoa case of 1945,the courts held that:

Social,as distinct from industrial,regulation is the major focus of the:

A conglomerate merger:

Suppose the firms in a five-firm industry have market shares of 30,30,20,10,and 10 percent,respectively.The Herfindahl index for the industry is:

(Consider This)The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving:

The Celler-Kefauver Act made vertical mergers legal,provided each firm does not have more than 30 percent of its relevant market.

All of the following can file antitrust charges under the Sherman Act except:

Price-fixing:

Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger.The U.S.Justice Department concludes the merger will boost the index to 5,500.The antitrust authorities will most likely:

Conspiracies to fix prices are:

A firm charged with monopolizing a market is less likely to be convicted if:

The main purpose of industrial regulation is to:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters

Exam 20: Antitrust Policy and Regulation

The optimal amount of social regulation occurs where the marginal benefit of such regulation:

The Celler-Kefauver Act outlawed interlocking directorates.

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

(Last Word)In 2001,Microsoft was found guilty of:

In which of the following sets of antitrust cases did the government gain convictions?

The view that the antitrust laws need to be strongly enforced to prevent illegal business behaviors,monopolization of markets,and allocative inefficiency is known as the:

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.

In the Alcoa case of 1945,the courts held that:

Social,as distinct from industrial,regulation is the major focus of the:

A conglomerate merger:

Suppose the firms in a five-firm industry have market shares of 30,30,20,10,and 10 percent,respectively.The Herfindahl index for the industry is:

(Consider This)The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving:

The Celler-Kefauver Act made vertical mergers legal,provided each firm does not have more than 30 percent of its relevant market.

All of the following can file antitrust charges under the Sherman Act except:

Price-fixing:

Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger.The U.S.Justice Department concludes the merger will boost the index to 5,500.The antitrust authorities will most likely:

Conspiracies to fix prices are:

A firm charged with monopolizing a market is less likely to be convicted if:

The main purpose of industrial regulation is to:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters