Question 1

The total costs of federal regulation

Accepted Answer

A) encompasses only explicit costs of satisfying regulatory demands. 
B) also includes the explicit costs associated with regulations issued by 50 different state governments. 
C) encompasses only opportunity costs of satisfying regulatory demands. 
D) encompasses both explicit and opportunity costs of satisfying regulatory demands.. 
A) encompasses only explicit costs of satisfying regulatory demands. 
B) also includes the explicit costs associated with regulations issued by 50 different state governments. 
C) encompasses only opportunity costs of satisfying regulatory demands. 
D) encompasses both explicit and opportunity costs of satisfying regulatory demands..

Question 2

A regulated natural monopolist allowed to earn a "fair" rate of return would produce to the point at which

Accepted Answer

A) P = LAC. 
B) MR = LAC. 
C) MR = MC. 
D) P = MR. 
A) P = LAC. 
B) MR = LAC. 
C) MR = MC. 
D) P = MR.

Question 3

The Supreme Court's decision in the Standard Oil of New Jersey case was

Accepted Answer

A) to force the company to send refund checks to customers. 
B) to force the company to pay $10 billion in fines. 
C) to increase the fine imposed by a lower court. 
D) to break up the company. 
A) to force the company to send refund checks to customers. 
B) to force the company to pay $10 billion in fines. 
C) to increase the fine imposed by a lower court. 
D) to break up the company.

Question 4

This agency is responsible for protecting consumers from products posing fire,electrical,chemical,or mechanical hazards or dangers to children.

Accepted Answer

A) Environmental Protection Agency 
B) Consumer Product Safety Commission 
C) Equal Employment Opportunity Commission 
D) Occupational Safety and Health Administration 
A) Environmental Protection Agency 
B) Consumer Product Safety Commission 
C) Equal Employment Opportunity Commission 
D) Occupational Safety and Health Administration

Question 5

The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the

Accepted Answer

A) capitulation hypothesis. 
B) creative hypothesis. 
C) captive hypothesis. 
D) capture hypothesis. 
A) capitulation hypothesis. 
B) creative hypothesis. 
C) captive hypothesis. 
D) capture hypothesis.

Question 6

The type of mergers that the Federal Trade Commission will most likely challenge are

Accepted Answer

A) mergers of firms within a relevant market. 
B) mergers of firms in different markets. 
C) mergers of firms that will generate economies of scale. 
D) mergers of firms in different geographical locations. 
A) mergers of firms within a relevant market. 
B) mergers of firms in different markets. 
C) mergers of firms that will generate economies of scale. 
D) mergers of firms in different geographical locations.

Question 7

The first antitrust law in the United States was the

Accepted Answer

A) FTC Act. 
B) Clayton Act. 
C) Sherman Act. 
D) Robinson-Patman Act. 
A) FTC Act. 
B) Clayton Act. 
C) Sherman Act. 
D) Robinson-Patman Act.

Question 8

The possession of monopoly power and the willful acquisition of that power is

Accepted Answer

A) defined in the Sherman Antitrust Act as monopolization. 
B) defined by the Supreme Court as monopolization. 
C) not defined as monopolization until a statement about profits is included. 
D) not the definition of monopolization. 
A) defined in the Sherman Antitrust Act as monopolization. 
B) defined by the Supreme Court as monopolization. 
C) not defined as monopolization until a statement about profits is included. 
D) not the definition of monopolization.

Question 9

When production is characterized by persistently declining long-run average costs as output increases,

Accepted Answer

A) the costs of production are greater when competition exists than when a single firm produces a good. 
B) it is impossible for two firms to compete in the market. 
C) the costs are lower if a single firm exists,and even if the firm is unregulated,price will still be lower with a single firm. 
D) there is no need for the government to limit competition by licensing requirements. 
A) the costs of production are greater when competition exists than when a single firm produces a good. 
B) it is impossible for two firms to compete in the market. 
C) the costs are lower if a single firm exists,and even if the firm is unregulated,price will still be lower with a single firm. 
D) there is no need for the government to limit competition by licensing requirements.

Question 10

One key purpose of economic regulation is

Accepted Answer

A) to force a firm to produce at the point at which 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 at which 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 11

Which of the following is NOT an antitrust law?

Accepted Answer

A) The Robinson-Patman Act 
B) The Smoot-Hawley Act 
C) The FTC Act 
D) The Sherman Act 
A) The Robinson-Patman Act 
B) The Smoot-Hawley Act 
C) The FTC Act 
D) The Sherman Act

Question 12

The key issue in determining the relevant product market is

Accepted Answer

A) the degree of interchangeability between products. 
B) the specific geographic area in which competing products overlap. 
C) the production processes used to produce the goods. 
D) the market share test. 
A) the degree of interchangeability between products. 
B) the specific geographic area in which competing products overlap. 
C) the production processes used to produce the goods. 
D) the market share test.

Question 13

Which antitrust law is sometimes called the "Chain Store Act"?

Accepted Answer

A) Sherman Act 
B) Clayton Act 
C) Robinson-Patman Act 
D) Federal Trade Act 
A) Sherman Act 
B) Clayton Act 
C) Robinson-Patman Act 
D) Federal Trade Act

Question 14

U.S.government regulation of social and economic activity

Accepted Answer

A) only began after World War II. 
B) costs less now than it did in the 1980s. 
C) has increased steadily since 1970. 
D) is confined to antitrust law. 
A) only began after World War II. 
B) costs less now than it did in the 1980s. 
C) has increased steadily since 1970. 
D) is confined to antitrust law.

Question 15

When a regulator is concerned about pleasing different groups in order to keep employed,this is known as the

Accepted Answer

A) share-the-gains,share-the-pains theory. 
B) regulatory hypothesis. 
C) capture hypothesis. 
D) creative theory. 
A) share-the-gains,share-the-pains theory. 
B) regulatory hypothesis. 
C) capture hypothesis. 
D) creative theory.

Question 16

When regulating a natural monopoly,average cost pricing is usually used rather than marginal cost pricing because

Accepted Answer

A) average cost pricing allows the firm to earn a normal rate of return on investment,while marginal cost pricing leads to economic losses. 
B) average cost pricing is more economically efficient than marginal cost pricing. 
C) average cost pricing leads to lower profits than marginal cost pricing. 
D) average cost pricing leads to a lower market price than marginal cost pricing. 
A) average cost pricing allows the firm to earn a normal rate of return on investment,while marginal cost pricing leads to economic losses. 
B) average cost pricing is more economically efficient than marginal cost pricing. 
C) average cost pricing leads to lower profits than marginal cost pricing. 
D) average cost pricing leads to a lower market price than marginal cost pricing.

Question 17

-In the above figure,if this natural monopolist were unregulated,the profit maximizing firm would sell the product at the price ________.

Accepted Answer

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

Question 18

Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as

Accepted Answer

A) average cost regulation. 
B) marginal cost regulation. 
C) rate-of-return regulation. 
D) cost-of-service regulation. 
A) average cost regulation. 
B) marginal cost regulation. 
C) rate-of-return regulation. 
D) cost-of-service regulation.

Question 19

The Sherman Antitrust Act was enforced in 1906 by a ruling of the Supreme Court regarding the monopolization of the oil industry by

Accepted Answer

A) Getty Oil of Oklahoma. 
B) Texaco Oil of Texas. 
C) Gulf Oil of Pennsylvania. 
D) Standard Oil of New Jersey. 
A) Getty Oil of Oklahoma. 
B) Texaco Oil of Texas. 
C) Gulf Oil of Pennsylvania. 
D) Standard Oil of New Jersey.

Question 20

All of the following are exempt from antitrust enforcement EXCEPT

Accepted Answer

A) professional baseball. 
B) labor unions. 
C) hospitals. 
D) television and radio stations. 
A) professional baseball. 
B) labor unions. 
C) hospitals. 
D) television and radio stations.

Exam 14: Regulation and Antitrust Policy in a Globalized Economy

The total costs of federal regulation

A regulated natural monopolist allowed to earn a "fair" rate of return would produce to the point at which

The Supreme Court's decision in the Standard Oil of New Jersey case was

This agency is responsible for protecting consumers from products posing fire,electrical,chemical,or mechanical hazards or dangers to children.

The theory that regulators' behavior will eventually be compromised by the special interests they regulate is known as the

The type of mergers that the Federal Trade Commission will most likely challenge are

The first antitrust law in the United States was the

The possession of monopoly power and the willful acquisition of that power is

When production is characterized by persistently declining long-run average costs as output increases,

One key purpose of economic regulation is

Which of the following is NOT an antitrust law?

The key issue in determining the relevant product market is

Which antitrust law is sometimes called the "Chain Store Act"?

U.S.government regulation of social and economic activity

When a regulator is concerned about pleasing different groups in order to keep employed,this is known as the

When regulating a natural monopoly,average cost pricing is usually used rather than marginal cost pricing because

-In the above figure,if this natural monopolist were unregulated,the profit maximizing firm would sell the product at the price ________.

Regulation that is based on allowing prices to reflect only the actual operating cost of production is known as

The Sherman Antitrust Act was enforced in 1906 by a ruling of the Supreme Court regarding the monopolization of the oil industry by

All of the following are exempt from antitrust enforcement EXCEPT

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