Question 1

Which of the following calculations is necessary to determine whether a regulation should be implemented?

Accepted Answer

A) Marginal cost-marginal revenue calculations 
B) Cost effectiveness calculations 
C) Total cost-total revenue calculations 
D) Cost minimization calculations 
E) Cost-benefit calculations 
A) Marginal cost-marginal revenue calculations 
B) Cost effectiveness calculations 
C) Total cost-total revenue calculations 
D) Cost minimization calculations 
E) Cost-benefit calculations

Question 2

Most natural monopolies are regulated at some level by government because:

Accepted Answer

A) an unregulated natural monopolist would produce an inefficiently low level of output. 
B) an unregulated natural monopolist would produce only for government bureaucrats. 
C) an unregulated natural monopolist would charge an inefficiently low price in the market. 
D) an unregulated natural monopolist would charge an inefficiently high price in the market. 
E) an unregulated natural monopolist would produce a large quantity at a high price. 
A) an unregulated natural monopolist would produce an inefficiently low level of output. 
B) an unregulated natural monopolist would produce only for government bureaucrats. 
C) an unregulated natural monopolist would charge an inefficiently low price in the market. 
D) an unregulated natural monopolist would charge an inefficiently high price in the market. 
E) an unregulated natural monopolist would produce a large quantity at a high price.

Question 3

One necessary step in demonstrating monopolistic behavior is to define the market.In this process defendants would:

Accepted Answer

A) claim that the market was not in equilibrium. 
B) want the market defined as narrowly as possible. 
C) deny that a market existed. 
D) assert that the market was not stable. 
E) want the market defined as broadly as possible. 
A) claim that the market was not in equilibrium. 
B) want the market defined as narrowly as possible. 
C) deny that a market existed. 
D) assert that the market was not stable. 
E) want the market defined as broadly as possible.

Question 4

When regulating a natural monopoly, government officials face a dilemma that:

Accepted Answer

A) the efficient price may not allow the firm to break even. 
B) the efficient price may lead to an inefficiently high level of output. 
C) the efficient price leads to an output level that is too low. 
D) the efficient price may not allow the firm to enjoy positive profits. 
E) long-run average costs are constantly increasing. 
A) the efficient price may not allow the firm to break even. 
B) the efficient price may lead to an inefficiently high level of output. 
C) the efficient price leads to an output level that is too low. 
D) the efficient price may not allow the firm to enjoy positive profits. 
E) long-run average costs are constantly increasing.

Question 5

When a monopoly is regulated it is required to sell lower output at a lower price.

Accepted Answer

A) True 
 B)False

Question 6

The antitrust laws in the United States were created in the late 1800s as a result of :

Accepted Answer

A) the emergence of large and dominant businesses in railroads, steel, oil, mining and finance. 
B) the government decision to take responsibility for the improvement of trade deficit. 
C) the first illegal cartel, created in late 1800s. 
D) a steep decline in prices of primary goods in the United States. 
E) the United States being threatened by an external aggression. 
A) the emergence of large and dominant businesses in railroads, steel, oil, mining and finance. 
B) the government decision to take responsibility for the improvement of trade deficit. 
C) the first illegal cartel, created in late 1800s. 
D) a steep decline in prices of primary goods in the United States. 
E) the United States being threatened by an external aggression.

Question 7

Which of the following is true ofthe General Agreement on Tariffs and Trade (GATT)?

Accepted Answer

A) It is now called the World Agreement on Trade and Tariffs. 
B) It was the global trade agreement that did away with the gold standard. 
C) It was a United States' policy to raise tariffs on imported sugar. 
D) It was the first global trade agreement that followed World War II. 
E) It was a global trade agreement to raise tariffs. 
A) It is now called the World Agreement on Trade and Tariffs. 
B) It was the global trade agreement that did away with the gold standard. 
C) It was a United States' policy to raise tariffs on imported sugar. 
D) It was the first global trade agreement that followed World War II. 
E) It was a global trade agreement to raise tariffs.

Question 8

When examining the costs of regulation to the U.S.economy, economists can safely ignore the opportunity costs of regulation because they are relatively insignificant compared with the direct costs of regulation.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that the demand for apples in Washington is elastic and the supply is inelastic.If the government of Washington passes a law prohibiting the use of synthetic pesticides that increases the marginal and average costs of producing apples, then:

Accepted Answer

A) the price of Washington State apples will decline. 
B) Washington will stop producing apples, and New York apple growers will benefit. 
C) apple growers will pass most of the increased costs on to consumers in the form of higher apple prices. 
D) apple growers will keep prices constant but reduce costs by advertising less. 
E) apple growers will bear most of the increased costs of regulation, and prices will increase only slightly. 
A) the price of Washington State apples will decline. 
B) Washington will stop producing apples, and New York apple growers will benefit. 
C) apple growers will pass most of the increased costs on to consumers in the form of higher apple prices. 
D) apple growers will keep prices constant but reduce costs by advertising less. 
E) apple growers will bear most of the increased costs of regulation, and prices will increase only slightly.

Question 10

Which of the following statements best describes the difference between economic regulation and social regulation?

Accepted Answer

A) Economic regulation has little to do with price and output while social regulation explicitly deals with price and output. 
B) Social regulation is concerned with directly redistributing wealth while economic regulation is concerned with accumulation of wealth. 
C) Economic regulation is concerned with directly redistributing wealth while social regulation is concerned with accumulation of wealth. 
D) Social regulation has historically targeted industries such as railroads and airlines while economic regulation has all the industries under its purview. 
E) Economic regulation deals with price and output , while social regulation deals with health and safety matters that apply across several industries. 
A) Economic regulation has little to do with price and output while social regulation explicitly deals with price and output. 
B) Social regulation is concerned with directly redistributing wealth while economic regulation is concerned with accumulation of wealth. 
C) Economic regulation is concerned with directly redistributing wealth while social regulation is concerned with accumulation of wealth. 
D) Social regulation has historically targeted industries such as railroads and airlines while economic regulation has all the industries under its purview. 
E) Economic regulation deals with price and output , while social regulation deals with health and safety matters that apply across several industries.

Question 11

Which of the following is a measure of the size of the total economy?

Accepted Answer

A) Gross domestic product 
B) Government debt burden 
C) The ratio of imports to exports 
D) Stock of inventories 
E) The money supply 
A) Gross domestic product 
B) Government debt burden 
C) The ratio of imports to exports 
D) Stock of inventories 
E) The money supply

Question 12

A market that is shared equally by 100 firms would have a Herfindahl index of :

Accepted Answer

A) 1. 
B) 1, 000. 
C) 500. 
D) 100. 
E) 50. 
A) 1. 
B) 1, 000. 
C) 500. 
D) 100. 
E) 50.

Question 13

Which of the following practices is notrestricted by the antitrust law in the United States?

Accepted Answer

A) Contracts and conspiracies in restraint of trade 
B) Attempts to monopolize a market 
C) Mergers that substantially lessen competition 
D) Unfair or deceptive acts of competition 
E) All forms of quality discrimination 
A) Contracts and conspiracies in restraint of trade 
B) Attempts to monopolize a market 
C) Mergers that substantially lessen competition 
D) Unfair or deceptive acts of competition 
E) All forms of quality discrimination

Question 14

Under the second phase of antitrust policy that began in 1914 in the U.S. , the courts used _____ in order to judge the firms' actions.

Accepted Answer

A) a rule of reason 
B) the rule of 72 
C) a rule of thirds 
D) a per se rule 
E) the rule of law 
A) a rule of reason 
B) the rule of 72 
C) a rule of thirds 
D) a per se rule 
E) the rule of law

Question 15

Bills introduced in the United States in 2009 reduced overall trade between America and the rest of the world.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following does the Sherman Antitrust Act forbid?

Accepted Answer

A) Monopolization or attempts to monopolize 
B) All types of price discrimination 
C) Unfair or deceptive acts 
D) Unfair methods of competition 
E) Practices that might keep other firms from entering into an industry 
A) Monopolization or attempts to monopolize 
B) All types of price discrimination 
C) Unfair or deceptive acts 
D) Unfair methods of competition 
E) Practices that might keep other firms from entering into an industry

Question 17

A regulated natural monopoly is allowed to set a price which will enable it to earn an above-normal profit.

Accepted Answer

A) True 
 B)False

Question 18

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation. Figure 26.2   In the figure,
D: Demand curve for automobiles
S1: Supply curve of automobiles prior to regulation
S2: Supply curve of automobiles after regulation
FG: Clean up cost per unit
According to Figure 26.2, the total societal surplus after the regulation is:

Accepted Answer

A) area BEC. 
B) area AECJ. 
C) area IGQ1Q2. 
D) area 0FIQ2. 
E) area BAJ. 
A) area BEC. 
B) area AECJ. 
C) area IGQ1Q2. 
D) area 0FIQ2. 
E) area BAJ.

Question 19

Under George W.Bush's administration, antitrust policy:

Accepted Answer

A) became much more strict. 
B) prohibited every merger attempts. 
C) focused increasingly on environmental concerns. 
D) became more relaxed. 
E) ignored financial regulation and corporate scandals. 
A) became much more strict. 
B) prohibited every merger attempts. 
C) focused increasingly on environmental concerns. 
D) became more relaxed. 
E) ignored financial regulation and corporate scandals.

Question 20

Which of the following was formed in October 2001 to make the national antitrust laws more consistent across the developing and developed countries of the world?

Accepted Answer

A) International Cooperation Network 
B) International Competition Network 
C) International Communication Network 
D) International Competition Organization 
E) International Communication Organization 
A) International Cooperation Network 
B) International Competition Network 
C) International Communication Network 
D) International Competition Organization 
E) International Communication Organization

Exam 47: Antitrust and Regulation

Which of the following calculations is necessary to determine whether a regulation should be implemented?

Most natural monopolies are regulated at some level by government because:

One necessary step in demonstrating monopolistic behavior is to define the market.In this process defendants would:

When regulating a natural monopoly, government officials face a dilemma that:

When a monopoly is regulated it is required to sell lower output at a lower price.

The antitrust laws in the United States were created in the late 1800s as a result of :

Which of the following is true ofthe General Agreement on Tariffs and Trade (GATT)?

When examining the costs of regulation to the U.S.economy, economists can safely ignore the opportunity costs of regulation because they are relatively insignificant compared with the direct costs of regulation.

Suppose that the demand for apples in Washington is elastic and the supply is inelastic.If the government of Washington passes a law prohibiting the use of synthetic pesticides that increases the marginal and average costs of producing apples, then:

Which of the following statements best describes the difference between economic regulation and social regulation?

Which of the following is a measure of the size of the total economy?

A market that is shared equally by 100 firms would have a Herfindahl index of :

Which of the following practices is notrestricted by the antitrust law in the United States?

Under the second phase of antitrust policy that began in 1914 in the U.S. , the courts used _____ in order to judge the firms' actions.

Bills introduced in the United States in 2009 reduced overall trade between America and the rest of the world.

Which of the following does the Sherman Antitrust Act forbid?

A regulated natural monopoly is allowed to set a price which will enable it to earn an above-normal profit.

Under George W.Bush's administration, antitrust policy:

Which of the following was formed in October 2001 to make the national antitrust laws more consistent across the developing and developed countries of the world?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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