Question 1

The antitrust laws are based on the:

Accepted Answer

A)  creative destruction view of competition. 
B)  idea that competition leads to greater economic efficiency than does a monopoly. 
C)  view that nonprice competition should be strictly regulated by government. 
D)  view that all negative externalities should be eliminated by government action. 
A)  creative destruction view of competition. 
B)  idea that competition leads to greater economic efficiency than does a monopoly. 
C)  view that nonprice competition should be strictly regulated by government. 
D)  view that all negative externalities should be eliminated by government action.

Question 2

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 3

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 government would likely 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 Cappa. 
D)  Firm 4 in Alpha and Firm 3 in Cappa. 
A)  Firm 1 in Alpha and Firm 6 in Delta. 
B)  Firms 3 and 4 in Beta. 
C)  Firms 1 and 2 in Cappa. 
D)  Firm 4 in Alpha and Firm 3 in Cappa.

Question 4

Behavioralists believe that:

Accepted Answer

A)  if four or fewer firms control more than half of the market for a product,then the Sherman Act is being violated. 
B)  industries should be judged on the basis of their price-output behavior and their technological progressiveness. 
C)  there is no evidence that any monopolistic industry has abused its market power. 
D)  all concentrations of economic power are socially undesirable. 
A)  if four or fewer firms control more than half of the market for a product,then the Sherman Act is being violated. 
B)  industries should be judged on the basis of their price-output behavior and their technological progressiveness. 
C)  there is no evidence that any monopolistic industry has abused its market power. 
D)  all concentrations of economic power are socially undesirable.

Question 5

Structuralists take the position that:

Accepted Answer

A)  the rule of reason is appropriate and desirable in interpreting the Sherman Act. 
B)  only unreasonable anticompetitive acts should be regarded as violations of the antitrust laws. 
C)  industries should be judged on the basis of their technological progress and their price-output behavior. 
D)  an industry that is highly concentrated will behave monopolistically. 
A)  the rule of reason is appropriate and desirable in interpreting the Sherman Act. 
B)  only unreasonable anticompetitive acts should be regarded as violations of the antitrust laws. 
C)  industries should be judged on the basis of their technological progress and their price-output behavior. 
D)  an industry that is highly concentrated will behave monopolistically.

Question 6

(Consider This)According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

Accepted Answer

A)  Dell and Gateway (personal computer makers). 
B)  Boeing and Airbus (aircraft manufacturers). 
C)  Heinz and Del Monte (food product firms). 
D)  Sotheby's and Christie's (art auction houses). 
A)  Dell and Gateway (personal computer makers). 
B)  Boeing and Airbus (aircraft manufacturers). 
C)  Heinz and Del Monte (food product firms). 
D)  Sotheby's and Christie's (art auction houses).

Question 7

The Celler-Kefauver Act of 1950:

Accepted Answer

A)  outlawed price-fixing. 
B)  amended the Sherman Act. 
C)  amended the Clayton Act. 
D)  created the Civil Aeronautics Board (CA
B) . 
A)  outlawed price-fixing. 
B)  amended the Sherman Act. 
C)  amended the Clayton Act. 
D)  created the Civil Aeronautics Board (CA
B) .

Question 8

In the Microsoft antitrust case,the federal government said in essence that:

Accepted Answer

A)  the mere presence of monopoly violated the Sherman Act,irrespective of Microsoft's behavior. 
B)  Microsoft was a "bad monopoly." 
C)  Microsoft was generally a "good monopoly" but that its tying contracts involving Internet Explorer violated the Clayton Act. 
D)  the case was similar to the U.S.Steel case of 1920. 
A)  the mere presence of monopoly violated the Sherman Act,irrespective of Microsoft's behavior. 
B)  Microsoft was a "bad monopoly." 
C)  Microsoft was generally a "good monopoly" but that its tying contracts involving Internet Explorer violated the Clayton Act. 
D)  the case was similar to the U.S.Steel case of 1920.

Question 9

The "rule of reason" indicated that:

Accepted Answer

A)  if less than four firms account for three-fourths of an industry's sales,the industry is in violation of the Sherman Act. 
B)  social regulation should not be enforced unreasonably so that costs exceed benefits. 
C)  the mere possession of monopoly power is a violation of the antitrust laws. 
D)  only contracts and combinations that unreasonably restrain trade violate the antitrust laws. 
A)  if less than four firms account for three-fourths of an industry's sales,the industry is in violation of the Sherman Act. 
B)  social regulation should not be enforced unreasonably so that costs exceed benefits. 
C)  the mere possession of monopoly power is a violation of the antitrust laws. 
D)  only contracts and combinations that unreasonably restrain trade violate the antitrust laws.

Question 10

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 11

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 12

Antitrust authorities are least likely to take action against:

Accepted Answer

A)  conglomerate mergers. 
B)  horizontal mergers. 
C)  interlocking directorates. 
D)  price-fixing. 
A)  conglomerate mergers. 
B)  horizontal mergers. 
C)  interlocking directorates. 
D)  price-fixing.

Question 13

In the U.S.Steel case,the court ruled that:

Accepted Answer

A)  even though a firm's behavior might be legal,the mere possession of monopoly power was in violation of the Sherman Act. 
B)  only monopolies that unreasonably restrain trade are subject to antitrust action under the Sherman Act. 
C)  when made by dominant firms,tying contracts are illegal,per se. 
D)  the company violated the Clayton Act and therefore should be dissolved into several competing firms. 
A)  even though a firm's behavior might be legal,the mere possession of monopoly power was in violation of the Sherman Act. 
B)  only monopolies that unreasonably restrain trade are subject to antitrust action under the Sherman Act. 
C)  when made by dominant firms,tying contracts are illegal,per se. 
D)  the company violated the Clayton Act and therefore should be dissolved into several competing firms.

Question 14

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

Accepted Answer

A)  public interest theory of regulation. 
B)  theory of natural monopolies. 
C)  legal cartel theory of regulation. 
D)  Alcoa and U.S.Steel court decisions. 
A)  public interest theory of regulation. 
B)  theory of natural monopolies. 
C)  legal cartel theory of regulation. 
D)  Alcoa and U.S.Steel court decisions.

Question 15

The main purpose of the antitrust laws is:

Accepted Answer

A)  to encourage firms to produce where P > MC. 
B)  the elimination of both negative and positive externalities. 
C)  to prevent the monopolization of industries. 
D)  to regulate natural monopolies. 
A)  to encourage firms to produce where P > MC. 
B)  the elimination of both negative and positive externalities. 
C)  to prevent the monopolization of industries. 
D)  to regulate natural monopolies.

Question 16

Which one of the following is not prohibited by the original Clayton Act?

Accepted Answer

A)  The purchase of the stocks of rival firms that lessens competition. 
B)  The purchase of the assets of rival firms that lessens competition. 
C)  An exclusive dealer or tying agreements that lessen competition. 
D)  Price discrimination that lessens competition. 
A)  The purchase of the stocks of rival firms that lessens competition. 
B)  The purchase of the assets of rival firms that lessens competition. 
C)  An exclusive dealer or tying agreements that lessen competition. 
D)  Price discrimination that lessens competition.

Question 17

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

Accepted Answer

A) True 
 B)False

Question 18

The Celler-Kefauver Act of 1950:

Accepted Answer

A)  modified patent legislation by reducing the number of years over which a patent is applicable. 
B)  prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition. 
C)  declared all conglomerate mergers to be illegal. 
D)  prohibited any firm from buying the stock of another firm where the effect was to lessen competition. 
A)  modified patent legislation by reducing the number of years over which a patent is applicable. 
B)  prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition. 
C)  declared all conglomerate mergers to be illegal. 
D)  prohibited any firm from buying the stock of another firm where the effect was to lessen competition.

Question 19

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

Accepted Answer

A) True 
 B)False

Question 20

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Accepted Answer

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

The antitrust laws are based on the:

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

Behavioralists believe that:

Structuralists take the position that:

(Consider This)According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

The Celler-Kefauver Act of 1950:

In the Microsoft antitrust case,the federal government said in essence that:

The "rule of reason" indicated that:

The antitrust laws are enforced by the:

Interlocking directorates are:

Antitrust authorities are least likely to take action against:

In the U.S.Steel case,the court ruled that:

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

The main purpose of the antitrust laws is:

Which one of the following is not prohibited by the original Clayton Act?

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

The Celler-Kefauver Act of 1950:

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

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 antitrust laws are based on the:

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

Behavioralists believe that:

Structuralists take the position that:

(Consider This)According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

The Celler-Kefauver Act of 1950:

In the Microsoft antitrust case,the federal government said in essence that:

The "rule of reason" indicated that:

The antitrust laws are enforced by the:

Interlocking directorates are:

Antitrust authorities are least likely to take action against:

In the U.S.Steel case,the court ruled that:

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

The main purpose of the antitrust laws is:

Which one of the following is not prohibited by the original Clayton Act?

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

The Celler-Kefauver Act of 1950:

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

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