Question 1

The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the

Accepted Answer

A) capture hypothesis. 
B) law of increasing social well-being. 
C) share-the-gains,share-the-pains hypothesis. 
D) marginal benefit pricing hypothesis. 
A) capture hypothesis. 
B) law of increasing social well-being. 
C) share-the-gains,share-the-pains hypothesis. 
D) marginal benefit pricing hypothesis.

Question 2

The federal regulatory agency whose mission is to regulate workplace health and safety is the

Accepted Answer

A) AFL-CIO. 
B) FTC. 
C) OSHA. 
D) SEC. 
A) AFL-CIO. 
B) FTC. 
C) OSHA. 
D) SEC.

Question 3

The statement "Every contract,combination in the form of a trust or otherwise,or conspiracy,in restraint of trade or commerce ..." is found in the

Accepted Answer

A) Sherman Antitrust Act. 
B) Clayton Antitrust Act. 
C) Robinson-Patman Act. 
D) Interstate Commerce Commission Act. 
A) Sherman Antitrust Act. 
B) Clayton Antitrust Act. 
C) Robinson-Patman Act. 
D) Interstate Commerce Commission Act.

Question 4

According to the capture hypothesis of regulation,

Accepted Answer

A) regulation favors producers over consumers because the producers were able to pay off the regulators. 
B) regulation eventually favors producers over consumers because the producers have more at stake than individual consumers. 
C) regulation benefits the regulators and the legislators who support the regulation by enabling them to obtain favors from both producers and consumers. 
D) regulation benefits the consumers over producers because the number of consumers is greater than the number of producers,giving the consumers more political clout. 
A) regulation favors producers over consumers because the producers were able to pay off the regulators. 
B) regulation eventually favors producers over consumers because the producers have more at stake than individual consumers. 
C) regulation benefits the regulators and the legislators who support the regulation by enabling them to obtain favors from both producers and consumers. 
D) regulation benefits the consumers over producers because the number of consumers is greater than the number of producers,giving the consumers more political clout.

Question 5

The first step in enforcing any antitrust policy is to

Accepted Answer

A) win the support of the public. 
B) win congressional approval. 
C) win the approval of the state senators from the state where the company is headquartered. 
D) define the market. 
A) win the support of the public. 
B) win congressional approval. 
C) win the approval of the state senators from the state where the company is headquartered. 
D) define the market.

Question 6

Regulators often adopt policies that benefit

Accepted Answer

A) consumers and injure producers. 
B) the firms regulated rather than consumers. 
C) only the government. 
D) no one. 
A) consumers and injure producers. 
B) the firms regulated rather than consumers. 
C) only the government. 
D) no one.

Question 7

-Use the above figure.If a commission regulates the above monopoly using fair-return (average cost pricing),then the industry's output will be ________ and the product's price will be ________.

Accepted Answer

A)  $\mathrm { Q } _ { 1 }$ ;
$P _ { 1 }$ 
B)  $\mathrm { Q } _ { 2 }$ ;
$\mathrm { P } _ { 3 }$ 
C)  $\mathrm { Q } _ { 3 }$ ;
$P _ { 2 }$ 
D)  $\mathrm { Q } _ { 4 }$ ;
$P _ { 1 }$ 
A)  $\mathrm { Q } _ { 1 }$ ;
$P _ { 1 }$ 
B)  $\mathrm { Q } _ { 2 }$ ;
$\mathrm { P } _ { 3 }$ 
C)  $\mathrm { Q } _ { 3 }$ ;
$P _ { 2 }$ 
D)  $\mathrm { Q } _ { 4 }$ ;
$P _ { 1 }$

Question 8

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 9

The notion that regulated industry members themselves,sooner or later,are able to control regulatory bodies is referred to as

Accepted Answer

A) consumerism. 
B) cartelization. 
C) the capture theory. 
D) the control theory. 
A) consumerism. 
B) cartelization. 
C) the capture theory. 
D) the control theory.

Question 10

-In the above figure,if the monopolist engages in marginal cost pricing,what are its output and price?

Accepted Answer

A) 1,200,$3 
B) 900,$7 
C) 700,$7 
D) 700,$10 
A) 1,200,$3 
B) 900,$7 
C) 700,$7 
D) 700,$10

Question 11

-In the above figure,which of the following statements is FALSE if the firm is operating at output level Q2?

Accepted Answer

A) The output is equivalent to an unregulated monopolist. 
B) Economic profits are positive. 
C) The price is lower than at an equivalent firm forced by regulators to charge ATC pricing. 
D) Average costs would be lowered by expanding output. 
A) The output is equivalent to an unregulated monopolist. 
B) Economic profits are positive. 
C) The price is lower than at an equivalent firm forced by regulators to charge ATC pricing. 
D) Average costs would be lowered by expanding output.

Question 12

Antitrust laws in the United States

Accepted Answer

A) are an attempt to foster competition. 
B) are not necessary in the twenty-first century. 
C) have not been used in the past twenty-five years. 
D) are the same as the laws in the European Union. 
A) are an attempt to foster competition. 
B) are not necessary in the twenty-first century. 
C) have not been used in the past twenty-five years. 
D) are the same as the laws in the European Union.

Question 13

According to the capture hypothesis,

Accepted Answer

A) regulators eventually support the views of consumers instead of the firms or the taxpayers,regardless of the reasons why the regulatory agency was established. 
B) regulators support the view of the regulated firms all along because that is the reason the regulatory agency was established. 
C) regulators eventually support the views of the regulated firms instead of the consumers or taxpayers,regardless of why the regulatory agency was established. 
D) regulators eventually support the views of either the firms or the consumers,but at the expense of the taxpayers,regardless of the reasons why the regulatory agency was established. 
A) regulators eventually support the views of consumers instead of the firms or the taxpayers,regardless of the reasons why the regulatory agency was established. 
B) regulators support the view of the regulated firms all along because that is the reason the regulatory agency was established. 
C) regulators eventually support the views of the regulated firms instead of the consumers or taxpayers,regardless of why the regulatory agency was established. 
D) regulators eventually support the views of either the firms or the consumers,but at the expense of the taxpayers,regardless of the reasons why the regulatory agency was established.

Question 14

-In the above figure,if this natural monopolist were forced to use marginal cost pricing,it would sell the product at the price ________.

Accepted Answer

A) A 
B) C 
C) E 
D) F 
A) A 
B) C 
C) E 
D) F

Question 15

When companies sell slightly different forms of a product to different groups of customers,this is known as

Accepted Answer

A) market testing. 
B) editions. 
C) adaptations. 
D) versioning. 
A) market testing. 
B) editions. 
C) adaptations. 
D) versioning.

Question 16

The purpose of social regulation is

Accepted Answer

A) to force a firm to produce at the point where marginal cost equals marginal revenue. 
B) to control the quality of service provided by a monopolist. 
C) to control the price that regulated enterprises are allowed to charge. 
D) to focus on the impact of production on the environment and society,the working conditions under which goods and services are produced,and sometimes the physical attributes of goods. 
A) to force a firm to produce at the point where marginal cost equals marginal revenue. 
B) to control the quality of service provided by a monopolist. 
C) to control the price that regulated enterprises are allowed to charge. 
D) to focus on the impact of production on the environment and society,the working conditions under which goods and services are produced,and sometimes the physical attributes of goods.

Question 17

Which of the following would most likely promote competitive pricing of products?

Accepted Answer

A) Robinson-Patman Act 
B) Wheeler-Lea Act 
C) Federal Trade Commission Act 
D) Clayton Act 
A) Robinson-Patman Act 
B) Wheeler-Lea Act 
C) Federal Trade Commission Act 
D) Clayton Act

Question 18

Credence goods are particularly susceptible to the lemons problem because

Accepted Answer

A) they have qualities that are difficult for producers to fully assess. 
B) they have qualities that are difficult for consumers to fully assess. 
C) creative responses among producers create volatility in market supply. 
D) creative responses among consumers create volatility in market demand. 
A) they have qualities that are difficult for producers to fully assess. 
B) they have qualities that are difficult for consumers to fully assess. 
C) creative responses among producers create volatility in market supply. 
D) creative responses among consumers create volatility in market demand.

Question 19

For a natural monopoly,long-run average costs

Accepted Answer

A) fall as output increases. 
B) rise as output increases. 
C) fall as output falls. 
D) rise as output falls. 
A) fall as output increases. 
B) rise as output increases. 
C) fall as output falls. 
D) rise as output falls.

Question 20

"Regulations do not always have the intended result." Do you agree or disagree? Why?

Accepted Answer

Agree.Firms often try to avoid the effec

Exam 14: Regulation and Antitrust Policy in a Globalized Economy

The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the

The federal regulatory agency whose mission is to regulate workplace health and safety is the

The statement "Every contract,combination in the form of a trust or otherwise,or conspiracy,in restraint of trade or commerce ..." is found in the

According to the capture hypothesis of regulation,

The first step in enforcing any antitrust policy is to

Regulators often adopt policies that benefit

-Use the above figure.If a commission regulates the above monopoly using fair-return (average cost pricing),then the industry's output will be ________ and the product's price will be ________.

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

The notion that regulated industry members themselves,sooner or later,are able to control regulatory bodies is referred to as

-In the above figure,if the monopolist engages in marginal cost pricing,what are its output and price?

-In the above figure,which of the following statements is FALSE if the firm is operating at output level Q2?

Antitrust laws in the United States

According to the capture hypothesis,

-In the above figure,if this natural monopolist were forced to use marginal cost pricing,it would sell the product at the price ________.

When companies sell slightly different forms of a product to different groups of customers,this is known as

The purpose of social regulation is

Which of the following would most likely promote competitive pricing of products?

Credence goods are particularly susceptible to the lemons problem because

For a natural monopoly,long-run average costs

"Regulations do not always have the intended result." Do you agree or disagree? Why?

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

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

Filters

-Use the above figure.If a commission regulates the above monopoly using fair-return (average cost pricing),then the industry's output will be and the product's price will be .

-In the above figure,which of the following statements is FALSE if the firm is operating at output level Q₂?