Question 1

A major shortcoming of the Sherman Act was that

Accepted Answer

A)  when it was passed, there were no violations, so the Supreme Court ruled it unnecessary. 
B)  it failed to explicitly state which specific activities were illegal. 
C)  violators of the Act were forced out of business. 
D)  it was not enforced by the courts. 
A)  when it was passed, there were no violations, so the Supreme Court ruled it unnecessary. 
B)  it failed to explicitly state which specific activities were illegal. 
C)  violators of the Act were forced out of business. 
D)  it was not enforced by the courts.

Question 2

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 3

Which of the following is an example of an agency concerned with social regulation?

Accepted Answer

A)  Federal Communications Commission 
B)  Securities and Exchange Commission 
C)  Consumer Product Safety Commission 
D)  Federal Energy Regulatory Commission 
A)  Federal Communications Commission 
B)  Securities and Exchange Commission 
C)  Consumer Product Safety Commission 
D)  Federal Energy Regulatory Commission

Question 4

The antitrust legislation that forbids a company from selling goods on the condition that the purchaser must deal exclusively with that company is the

Accepted Answer

A)  Sherman Act. 
B)  Robinson-Patman Act. 
C)  Fair Trade Commission Act. 
D)  Clayton Act. 
A)  Sherman Act. 
B)  Robinson-Patman Act. 
C)  Fair Trade Commission Act. 
D)  Clayton Act.

Question 5

Which of the following is a possible market solution to the lemons problem?

Accepted Answer

A)  Producers might offer product guarantees and warranties. 
B)  Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products. 
C)  Government agencies might be charged with directly overseeing production and distribution of certain products. 
D)  Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly. 
A)  Producers might offer product guarantees and warranties. 
B)  Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products. 
C)  Government agencies might be charged with directly overseeing production and distribution of certain products. 
D)  Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.

Question 6

A measure of monopoly power used by the government is the

Accepted Answer

A)  percentage share of the relevant market or market share test. 
B)  profit of the firm compared to other firms in the industry. 
C)  price charged by the firm for goods and services. 
D)  percentage difference between price and marginal cost. 
A)  percentage share of the relevant market or market share test. 
B)  profit of the firm compared to other firms in the industry. 
C)  price charged by the firm for goods and services. 
D)  percentage difference between price and marginal cost.

Question 7

When consumers have less information about a product than do sellers, then this is the situation of

Accepted Answer

A)  asymmetric information. 
B)  rationality. 
C)  caveat emptor. 
D)  a market failure. 
A)  asymmetric information. 
B)  rationality. 
C)  caveat emptor. 
D)  a market failure.

Question 8

Explain the capture hypothesis.

Accepted Answer

The capture hypothesis is a theory of re

Question 9

Which of the following is NOT exempt from antitrust laws?

Accepted Answer

A)  professional baseball 
B)  labor unions 
C)  airlines 
D)  public transit systems 
A)  professional baseball 
B)  labor unions 
C)  airlines 
D)  public transit systems

Question 10

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

Exam 27: Regulation and Antitrust Policy in a Globalized Economy

A major shortcoming of the Sherman Act was that

According to the capture hypothesis

Which of the following is an example of an agency concerned with social regulation?

The antitrust legislation that forbids a company from selling goods on the condition that the purchaser must deal exclusively with that company is the

Which of the following is a possible market solution to the lemons problem?

A measure of monopoly power used by the government is the

When consumers have less information about a product than do sellers, then this is the situation of

Explain the capture hypothesis.

Which of the following is NOT exempt from antitrust laws?

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

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

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

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

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