Question 1

One organization in the United States today that is exempt from antitrust laws is

Accepted Answer

A) the automobile industry. 
B) professional baseball. 
C) the oil industry. 
D) the steel industry. 
A) the automobile industry. 
B) professional baseball. 
C) the oil industry. 
D) the steel industry.

Question 2

The FTC is

Accepted Answer

A) the act that prevents producers from driving out smaller competitors by means of selected discriminatory price cuts. 
B) the commission that investigates unfair competitive practices such as misleading advertising. 
C) an agency which has been set up to regulate the federal government. 
D) the agency set up to regulate hospitals. 
A) the act that prevents producers from driving out smaller competitors by means of selected discriminatory price cuts. 
B) the commission that investigates unfair competitive practices such as misleading advertising. 
C) an agency which has been set up to regulate the federal government. 
D) the agency set up to regulate hospitals.

Question 3

The Federal Trade Commission (FTC)is a regulatory agency that is responsible for preventing firms from engaging in misleading advertising.This type of regulation is known as

Accepted Answer

A) the Federal Register. 
B) social regulation. 
C) the market share test. 
D) economic regulation. 
A) the Federal Register. 
B) social regulation. 
C) the market share test. 
D) economic regulation.

Question 4

According to the ________ theory of regulation,regulators must take into account the preferences of legislators,consumers,and producers.

Accepted Answer

A) capture 
B) general interest 
C) public interest 
D) share-the-gains,share-the-pains 
A) capture 
B) general interest 
C) public interest 
D) share-the-gains,share-the-pains

Question 5

A natural monopoly that is not regulated will choose to produce at the

Accepted Answer

A) minimum point of the long-run average cost curve. 
B) point at which marginal cost is above average total cost. 
C) point at which the demand curve intersects the long-run average cost curve. 
D) point at which marginal revenue equals marginal cost. 
A) minimum point of the long-run average cost curve. 
B) point at which marginal cost is above average total cost. 
C) point at which the demand curve intersects the long-run average cost curve. 
D) point at which marginal revenue equals marginal cost.

Question 6

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

Accepted Answer

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

Question 7

U.S.securities firms recently agreed to pay a record amount of $1.4 billion in settlement charges brought by government regulators.Regulators claimed that firms had abused investors during the market boom of the 1990s.Abuses included analysts tailoring their research reports and ratings on the stocks they covered in order to win more business for their firm.If this settlement causes Wall Street firms to comply with the letter of the law but they violate the spirit of the law,the firms are engaging in

Accepted Answer

A) elimination of conflicts of interest. 
B) creative response. 
C) the capture hypothesis. 
D) deregulation. 
A) elimination of conflicts of interest. 
B) creative response. 
C) the capture hypothesis. 
D) deregulation.

Question 8

Defining the "relevant market" involves looking at two components.They are

Accepted Answer

A) the competitive market and the dominant market. 
B) the local market and the national market. 
C) the geographic market and the product market. 
D) the goods market and the services market. 
A) the competitive market and the dominant market. 
B) the local market and the national market. 
C) the geographic market and the product market. 
D) the goods market and the services market.

Question 9

The two most important rationales for government intervention in non-monopolistic markets are

Accepted Answer

A) market failure and asymmetric information. 
B) substandard products and job creation for public employees. 
C) job creation and income maintenance. 
D) unfair pricing and usury. 
A) market failure and asymmetric information. 
B) substandard products and job creation for public employees. 
C) job creation and income maintenance. 
D) unfair pricing and usury.

Question 10

The price charged by a monopolist is socially inefficient because the price

Accepted Answer

A) exceeds the true marginal cost of the resources used. 
B) is less than the opportunity cost of the resources used. 
C) puts the monopolist into a higher tax bracket. 
D) is too low. 
A) exceeds the true marginal cost of the resources used. 
B) is less than the opportunity cost of the resources used. 
C) puts the monopolist into a higher tax bracket. 
D) is too low.

Question 11

All of the following are forms of social regulation EXCEPT

Accepted Answer

A) the Food and Drug Administration regulating the quality of drugs. 
B) the Public Utility Commission regulating the price of telephone service. 
C) the Environmental Protection Association regulating automobile emissions. 
D) the Occupational Safety and Health Administration regulating workplace safety. 
A) the Food and Drug Administration regulating the quality of drugs. 
B) the Public Utility Commission regulating the price of telephone service. 
C) the Environmental Protection Association regulating automobile emissions. 
D) the Occupational Safety and Health Administration regulating workplace safety.

Question 12

Which of the following are exempt from the antitrust laws?

Accepted Answer

A) Colleges and universities 
B) All professional athletes 
C) Labor unions 
D) Deregulated industries 
A) Colleges and universities 
B) All professional athletes 
C) Labor unions 
D) Deregulated industries

Question 13

The potential for asymmetric information to bring about a general decline in product quality in an industry is known as the ________ problem.

Accepted Answer

A) moral hazard 
B) liability 
C) capture 
D) lemons 
A) moral hazard 
B) liability 
C) capture 
D) lemons

Question 14

Offering two or more products for sale as a set is known as

Accepted Answer

A) bundling. 
B) versioning. 
C) monopolizing. 
D) product sharing. 
A) bundling. 
B) versioning. 
C) monopolizing. 
D) product sharing.

Question 15

Why is antitrust legislation necessary?

Accepted Answer

A) Monopolies tend to misallocate resources. 
B) All monopolies are unlawful in the United States. 
C) Monopolies tend to allocate resources in a socially optimal manner. 
D) Monopolies will always make a profit in the long run. 
A) Monopolies tend to misallocate resources. 
B) All monopolies are unlawful in the United States. 
C) Monopolies tend to allocate resources in a socially optimal manner. 
D) Monopolies will always make a profit in the long run.

Question 16

Which of the following federal agencies is engaged in social regulation?

Accepted Answer

A) Equal Employment Opportunity Commission 
B) Office of the Comptroller of the Currency 
C) The Securities and Exchange Commission 
D) Federal Deposit Insurance Corporation 
A) Equal Employment Opportunity Commission 
B) Office of the Comptroller of the Currency 
C) The Securities and Exchange Commission 
D) Federal Deposit Insurance Corporation

Question 17

"Today the U.S.telecommunications industry remains heavily regulated by the government as it was some 30 years ago." Do you agree or disagree? Why?

Accepted Answer

Disagree.The telecommunications industry

Question 18

Regulators usually encourage natural monopolists to engage in

Accepted Answer

A) marginal cost pricing. 
B) average cost pricing. 
C) marginal cost pricing,with subsidies from the government offsetting the losses. 
D) inefficient pricing. 
A) marginal cost pricing. 
B) average cost pricing. 
C) marginal cost pricing,with subsidies from the government offsetting the losses. 
D) inefficient pricing.

Question 19

Regulators employ average cost pricing instead of marginal cost pricing because

Accepted Answer

A) average cost pricing is more efficient than marginal cost pricing. 
B) price must be high enough to cover all opportunity costs if the firm is to stay in business. 
C) the price is lower with average cost pricing. 
D) average cost pricing is simpler to compute than marginal cost pricing. 
A) average cost pricing is more efficient than marginal cost pricing. 
B) price must be high enough to cover all opportunity costs if the firm is to stay in business. 
C) the price is lower with average cost pricing. 
D) average cost pricing is simpler to compute than marginal cost pricing.

Question 20

The "primary motive" of regulators,according to the share-the-gains,share-the-pains theory,is to

Accepted Answer

A) maximize their income through accepting monetary payoffs from groups. 
B) ensure that every group gets what it wants. 
C) ensure that all customers share the benefits of regulation,and not just the wealthiest consumers. 
D) keep their jobs. 
A) maximize their income through accepting monetary payoffs from groups. 
B) ensure that every group gets what it wants. 
C) ensure that all customers share the benefits of regulation,and not just the wealthiest consumers. 
D) keep their jobs.

One organization in the United States today that is exempt from antitrust laws is

The FTC is

The Federal Trade Commission (FTC)is a regulatory agency that is responsible for preventing firms from engaging in misleading advertising.This type of regulation is known as

According to the ________ theory of regulation,regulators must take into account the preferences of legislators,consumers,and producers.

A natural monopoly that is not regulated will choose to produce at the

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

Defining the "relevant market" involves looking at two components.They are

The two most important rationales for government intervention in non-monopolistic markets are

The price charged by a monopolist is socially inefficient because the price

All of the following are forms of social regulation EXCEPT

Which of the following are exempt from the antitrust laws?

The potential for asymmetric information to bring about a general decline in product quality in an industry is known as the ________ problem.

Offering two or more products for sale as a set is known as

Why is antitrust legislation necessary?

Which of the following federal agencies is engaged in social regulation?

"Today the U.S.telecommunications industry remains heavily regulated by the government as it was some 30 years ago." Do you agree or disagree? Why?

Regulators usually encourage natural monopolists to engage in

Regulators employ average cost pricing instead of marginal cost pricing because

The "primary motive" of regulators,according to the share-the-gains,share-the-pains theory,is to

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

Exam 14: Regulation and Antitrust Policy in a Globalized Economy

One organization in the United States today that is exempt from antitrust laws is

The FTC is

The Federal Trade Commission (FTC)is a regulatory agency that is responsible for preventing firms from engaging in misleading advertising.This type of regulation is known as

According to the ________ theory of regulation,regulators must take into account the preferences of legislators,consumers,and producers.

A natural monopoly that is not regulated will choose to produce at the

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

Defining the "relevant market" involves looking at two components.They are

The two most important rationales for government intervention in non-monopolistic markets are

The price charged by a monopolist is socially inefficient because the price

All of the following are forms of social regulation EXCEPT

Which of the following are exempt from the antitrust laws?

The potential for asymmetric information to bring about a general decline in product quality in an industry is known as the ________ problem.

Offering two or more products for sale as a set is known as

Why is antitrust legislation necessary?

Which of the following federal agencies is engaged in social regulation?

"Today the U.S.telecommunications industry remains heavily regulated by the government as it was some 30 years ago." Do you agree or disagree? Why?

Regulators usually encourage natural monopolists to engage in

Regulators employ average cost pricing instead of marginal cost pricing because

The "primary motive" of regulators,according to the share-the-gains,share-the-pains theory,is to

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 marginal cost pricing,then the industry's output will be and the product's price will be .