Question 1

Which of the following is not an example of a cost externality?

Accepted Answer

A) the dumping of industrial waste into a lake 
B) unsightly billboards 
C) a neighbor that blasts his stereo system 
D) the building of a new type of jet fighter bomber 
E) All of the above 
A) the dumping of industrial waste into a lake 
B) unsightly billboards 
C) a neighbor that blasts his stereo system 
D) the building of a new type of jet fighter bomber 
E) All of the above D

Question 2

The supply for products that exhibit cost externalities is generally ________ the supply for products that do not.

Accepted Answer

A) greater than 
B) less than 
C) the same as 
D) greater or less (depending on the market)than 
A) greater than 
B) less than 
C) the same as 
D) greater or less (depending on the market)than A

Question 3

An example of a cost externality occurs when a mining company

Accepted Answer

A) dumps waste in river upstream from a popular fishing spot. 
B) produces coal that is not in demand in a recession. 
C) underpays its employees. 
D) overwork its employees. 
A) dumps waste in river upstream from a popular fishing spot. 
B) produces coal that is not in demand in a recession. 
C) underpays its employees. 
D) overwork its employees. A

Question 4

Describe the basic motives for businesses to merge.

Accepted Answer

Take advantage of synergies in operation

Question 5

The delay between when a problem occurs and when it is recognized is referred to as the

Accepted Answer

A) recognition lag. 
B) action lag. 
C) effectiveness lag. 
D) policy lag. 
A) recognition lag. 
B) action lag. 
C) effectiveness lag. 
D) policy lag.

Question 6

What are the five major reasons for government involvement in a market economy?

Accepted Answer

Provide the legal,monetary and social fr

Question 7

One school of anti-trust thought argues that,rather than ensuring efficiency,anti-trust laws are really aimed at

Accepted Answer

A) protecting small independent firms against large corporations. 
B) outlawing all monopolies whether they perform "bad acts" or not. 
C) price differentiation due to differences in quality and cost. 
D) restricting interlocking directorates. 
A) protecting small independent firms against large corporations. 
B) outlawing all monopolies whether they perform "bad acts" or not. 
C) price differentiation due to differences in quality and cost. 
D) restricting interlocking directorates.

Question 8

Which of the following is not considered a rationale for the intervention of government in the market process in the United States?

Accepted Answer

A) the redistribution of income 
B) the reallocation of resources 
C) the long-run planning of scarce resources 
D) the short-run stabilization of prices 
E) All of the above 
A) the redistribution of income 
B) the reallocation of resources 
C) the long-run planning of scarce resources 
D) the short-run stabilization of prices 
E) All of the above

Question 9

The Coase theorem states that,in the presence of cost externalities,an optimal equilibrium can be attained

Accepted Answer

A) with government taxation. 
B) by prohibiting production. 
C) by correctly defining property rights and through negotiation between the parties. 
D) None of the above 
A) with government taxation. 
B) by prohibiting production. 
C) by correctly defining property rights and through negotiation between the parties. 
D) None of the above

Question 10

Tying arrangements that lessen competition were made illegal by

Accepted Answer

A) the Sherman Anti-Trust Act. 
B) the Clayton Act. 
C) the Celler-Kefauver Act. 
D) the Robinson-Patman Act. 
A) the Sherman Anti-Trust Act. 
B) the Clayton Act. 
C) the Celler-Kefauver Act. 
D) the Robinson-Patman Act.

Question 11

Which of the following is the best example of a product or service that provides a benefit externality?

Accepted Answer

A) the construction of a private road that allows vehicles if a toll is paid 
B) a public library 
C) a bookstore that is open to everyone 
D) All of the above 
E) None of the above 
A) the construction of a private road that allows vehicles if a toll is paid 
B) a public library 
C) a bookstore that is open to everyone 
D) All of the above 
E) None of the above

Question 12

The delay between when a problem is recognized and when policy action is taken is referred to as the

Accepted Answer

A) recognition lag. 
B) action lag. 
C) effectiveness lag. 
D) policy lag. 
A) recognition lag. 
B) action lag. 
C) effectiveness lag. 
D) policy lag.

Question 13

Which of the following is an example of a government action to internalize a cost externality?

Accepted Answer

A) a fine imposed on a company that pollutes a stream 
B) the closing of a public library 
C) a sales tax on jewelry 
D) the increase on bridge tolls 
A) a fine imposed on a company that pollutes a stream 
B) the closing of a public library 
C) a sales tax on jewelry 
D) the increase on bridge tolls

Question 14

The delay between when a policy action is taken and when they affect the economy is referred to as the

Accepted Answer

A) impact lag. 
B) action lag. 
C) recognition lag. 
D) policy lag. 
A) impact lag. 
B) action lag. 
C) recognition lag. 
D) policy lag.

Question 15

An example of an activity that is likely to generate benefit (positive)externality is

Accepted Answer

A) a well manicured lawn of your neighbor. 
B) growing wild flowers on city street islands. 
C) fireworks on the 4th of July. 
D) an educated workforce. 
E) All of the above 
A) a well manicured lawn of your neighbor. 
B) growing wild flowers on city street islands. 
C) fireworks on the 4th of July. 
D) an educated workforce. 
E) All of the above

Question 16

Which of the following is responsible for controlling the money supply?

Accepted Answer

A) the Congress 
B) the Supreme Court 
C) the Federal Reserve 
D) the president 
A) the Congress 
B) the Supreme Court 
C) the Federal Reserve 
D) the president

Question 17

A merger between two companies in unrelated fields of business

Accepted Answer

A) will always lead to economies of scale. 
B) will generally increase the value of the unified firm compared to the value of the two companies before the merger because of the benefits of diversification. 
C) may not have any synergistic effects. 
D) will necessarily lead to an increase in the market power of the merged company. 
A) will always lead to economies of scale. 
B) will generally increase the value of the unified firm compared to the value of the two companies before the merger because of the benefits of diversification. 
C) may not have any synergistic effects. 
D) will necessarily lead to an increase in the market power of the merged company.

Question 18

Which of the following would not be considered a synergistic benefit from a merger?

Accepted Answer

A) an improvement in distribution systems 
B) economies of scale in production 
C) decreased cost of capital 
D) None of the above 
A) an improvement in distribution systems 
B) economies of scale in production 
C) decreased cost of capital 
D) None of the above

Question 19

The demand for products that provide benefit externalities is generally ________ the demand for products that do not.

Accepted Answer

A) greater than 
B) less than 
C) the same as 
D) greater or less (depending on the market)than 
A) greater than 
B) less than 
C) the same as 
D) greater or less (depending on the market)than

Question 20

When cost externalities exist,an optimal equilibrium can be attained if the government

Accepted Answer

A) restricts production. 
B) levies a tax for the difference between private costs and social costs. 
C) prohibits production. 
D) All three above 
E) Both A and B 
A) restricts production. 
B) levies a tax for the difference between private costs and social costs. 
C) prohibits production. 
D) All three above 
E) Both A and B

Which of the following is not an example of a cost externality?

The supply for products that exhibit cost externalities is generally ________ the supply for products that do not.

An example of a cost externality occurs when a mining company

Describe the basic motives for businesses to merge.

The delay between when a problem occurs and when it is recognized is referred to as the

What are the five major reasons for government involvement in a market economy?

One school of anti-trust thought argues that,rather than ensuring efficiency,anti-trust laws are really aimed at

Which of the following is not considered a rationale for the intervention of government in the market process in the United States?

The Coase theorem states that,in the presence of cost externalities,an optimal equilibrium can be attained

Tying arrangements that lessen competition were made illegal by

Which of the following is the best example of a product or service that provides a benefit externality?

The delay between when a problem is recognized and when policy action is taken is referred to as the

Which of the following is an example of a government action to internalize a cost externality?

The delay between when a policy action is taken and when they affect the economy is referred to as the

An example of an activity that is likely to generate benefit (positive)externality is

Which of the following is responsible for controlling the money supply?

A merger between two companies in unrelated fields of business

Which of the following would not be considered a synergistic benefit from a merger?

The demand for products that provide benefit externalities is generally ________ the demand for products that do not.

When cost externalities exist,an optimal equilibrium can be attained if the government

Introduction

The Firm and Its Goals

Supply and Demand

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Production Appendices 6A,6B,and 6C

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

The Global Soft Drink Industry

Filters

Exam 14: Government and Industry: Challenges and Opportunities for Todays Manager

Which of the following is not an example of a cost externality?

The supply for products that exhibit cost externalities is generally ________ the supply for products that do not.

An example of a cost externality occurs when a mining company

Describe the basic motives for businesses to merge.

The delay between when a problem occurs and when it is recognized is referred to as the

What are the five major reasons for government involvement in a market economy?

One school of anti-trust thought argues that,rather than ensuring efficiency,anti-trust laws are really aimed at

Which of the following is not considered a rationale for the intervention of government in the market process in the United States?

The Coase theorem states that,in the presence of cost externalities,an optimal equilibrium can be attained

Tying arrangements that lessen competition were made illegal by

Which of the following is the best example of a product or service that provides a benefit externality?

The delay between when a problem is recognized and when policy action is taken is referred to as the

Which of the following is an example of a government action to internalize a cost externality?

The delay between when a policy action is taken and when they affect the economy is referred to as the

An example of an activity that is likely to generate benefit (positive)externality is

Which of the following is responsible for controlling the money supply?

A merger between two companies in unrelated fields of business

Which of the following would not be considered a synergistic benefit from a merger?

The demand for products that provide benefit externalities is generally ________ the demand for products that do not.

When cost externalities exist,an optimal equilibrium can be attained if the government

Introduction

The Firm and Its Goals

Supply and Demand

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Production Appendices 6A,6B,and 6C

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

The Global Soft Drink Industry

Filters