Question 1

The Alcoa case:

Accepted Answer

A)  supported the structuralist approach to antitrust. 
B)  struck down the treble damages provision of the antitrust laws. 
C)  called for federal regulation of any industry with a four-firm concentration ratio in excess of 50 percent. 
D)  decision was consistent with a behavioralist approach. 
A)  supported the structuralist approach to antitrust. 
B)  struck down the treble damages provision of the antitrust laws. 
C)  called for federal regulation of any industry with a four-firm concentration ratio in excess of 50 percent. 
D)  decision was consistent with a behavioralist approach.

Question 2

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 industry with the greatest market power as measured by the Herfindahl index is:

Accepted Answer

A)  Alpha. 
B)  Beta. 
C)  Cappa. 
D)  Delta. 
A)  Alpha. 
B)  Beta. 
C)  Cappa. 
D)  Delta.

Question 3

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Accepted Answer

A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890. 
A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890.

Question 4

Critics of industrial regulation say that such regulation:

Accepted Answer

A)  benefits small firms at the expense of large firms. 
B)  perpetuates monopoly long after new technology has eroded natural monopoly. 
C)  creates insurmountable principal-agent problems. 
D)  has resulted mainly from the paradox of voting. 
A)  benefits small firms at the expense of large firms. 
B)  perpetuates monopoly long after new technology has eroded natural monopoly. 
C)  creates insurmountable principal-agent problems. 
D)  has resulted mainly from the paradox of voting.

Question 5

Economists who adhere to the laissez-faire antitrust perspective:

Accepted Answer

A)  view competition as a long-run dynamic process in which firms battle for dominance of markets but rarely can sustain such dominance once it is achieved. 
B)  believe the antitrust laws are as important today as they were when they were passed in the early 1900s. 
C)  say that an industry's structure,which is based on economies of scale,usually predicts the behavior of the industry firms. 
D)  contend that large,dominant firms should be broken into smaller competitive firms and then government should stand back and let competition prevail. 
A)  view competition as a long-run dynamic process in which firms battle for dominance of markets but rarely can sustain such dominance once it is achieved. 
B)  believe the antitrust laws are as important today as they were when they were passed in the early 1900s. 
C)  say that an industry's structure,which is based on economies of scale,usually predicts the behavior of the industry firms. 
D)  contend that large,dominant firms should be broken into smaller competitive firms and then government should stand back and let competition prevail.

Question 6

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

Accepted Answer

A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890. 
A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890.

Question 7

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

Accepted Answer

A)  horizontal market. 
B)  natural monopoly. 
C)  contestable market. 
D)  perfect market. 
A)  horizontal market. 
B)  natural monopoly. 
C)  contestable market. 
D)  perfect market.

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Accepted Answer

A)  Sherman Act,Section 1. 
B)  Sherman Act,Section 2. 
C)  Clayton Act. 
D)  Federal Trade Commission Act. 
A)  Sherman Act,Section 1. 
B)  Sherman Act,Section 2. 
C)  Clayton Act. 
D)  Federal Trade Commission Act.

Question 11

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Accepted Answer

A)  has been a clear failure. 
B)  is neutral in its impact to society's well-being,creating minimal net benefits at best. 
C)  has produced large net benefits for consumers and society. 
D)  has produced sizable efficiency gains in the communications industry,but not in the transportation industry (railways,trucking,airlines). 
A)  has been a clear failure. 
B)  is neutral in its impact to society's well-being,creating minimal net benefits at best. 
C)  has produced large net benefits for consumers and society. 
D)  has produced sizable efficiency gains in the communications industry,but not in the transportation industry (railways,trucking,airlines).

Question 12

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

Accepted Answer

A)  would reduce product price. 
B)  would increase product price. 
C)  might either increase product price or reduce product price. 
D)  will reduce average total cost. 
A)  would reduce product price. 
B)  would increase product price. 
C)  might either increase product price or reduce product price. 
D)  will reduce average total cost.

Question 13

A vertical merger involves a combining of one or more firms:

Accepted Answer

A)  as the result of one firm purchasing the assets of the other. 
B)  that are operating in entirely different industries. 
C)  operating at different stages of the production process in a particular industry. 
D)  operating at the same stage of the production process. 
A)  as the result of one firm purchasing the assets of the other. 
B)  that are operating in entirely different industries. 
C)  operating at different stages of the production process in a particular industry. 
D)  operating at the same stage of the production process.

Question 14

Responsibility for enforcing the antitrust laws rests:

Accepted Answer

A)  with the Interstate Commerce Commission. 
B)  with both the Department of Justice and the Federal Trade Commission. 
C)  solely with the Federal Trade Commission. 
D)  solely with the Department of Justice. 
A)  with the Interstate Commerce Commission. 
B)  with both the Department of Justice and the Federal Trade Commission. 
C)  solely with the Federal Trade Commission. 
D)  solely with the Department of Justice.

Question 15

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Accepted Answer

A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890. 
A)  Celler-Kefauver Act of 1950. 
B)  Wheeler-Lea Act of 1938. 
C)  Clayton Act of 1914. 
D)  Sherman Act of 1890.

Question 16

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 17

Which of the following is characteristic of a regulated natural monopoly?

Accepted Answer

A)  Extensive economies of scale. 
B)  The wasteful duplication of capital facilities in the event of competition. 
C)  The provision of an essential service. 
D)  All of these. 
A)  Extensive economies of scale. 
B)  The wasteful duplication of capital facilities in the event of competition. 
C)  The provision of an essential service. 
D)  All of these.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Critics of industrial regulation say that such regulation:

Accepted Answer

A)  contributes to X-inefficiency. 
B)  benefits small firms at the expense of large firms. 
C)  creates insurmountable principal-agent problems. 
D)  suffers from the free-rider problem. 
A)  contributes to X-inefficiency. 
B)  benefits small firms at the expense of large firms. 
C)  creates insurmountable principal-agent problems. 
D)  suffers from the free-rider problem.

Question 20

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

Accepted Answer

A)  price-fixing. 
B)  an interlocking directive. 
C)  a tying contract. 
D)  price discrimination. 
A)  price-fixing. 
B)  an interlocking directive. 
C)  a tying contract. 
D)  price discrimination.

The Alcoa case:

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Critics of industrial regulation say that such regulation:

Economists who adhere to the laissez-faire antitrust perspective:

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

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

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

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

A vertical merger involves a combining of one or more firms:

Responsibility for enforcing the antitrust laws rests:

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

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.

Which of the following is characteristic of a regulated natural monopoly?

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

Critics of industrial regulation say that such regulation:

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

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 Alcoa case:

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Critics of industrial regulation say that such regulation:

Economists who adhere to the laissez-faire antitrust perspective:

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

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

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

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

A vertical merger involves a combining of one or more firms:

Responsibility for enforcing the antitrust laws rests:

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

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.

Which of the following is characteristic of a regulated natural monopoly?

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

Critics of industrial regulation say that such regulation:

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

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