Deck 4: Government Regulation of Business

Question 1

ANZ Inc., a cement manufacturer, releases hazardous chemicals into the atmosphere and also into nearby streams. The pollutants released into the atmosphere exceed acceptable levels and the company is facing a suit from the residents of nearby towns. Under which of the following acts can the company be sued?

A) Sherman Act
B) Clayton Act
C) Resource Conservation and Recovery Act
D) Clean Air Act

Answer 1

D

Question 2

Which of the following is true of administrative agencies?

A) They can be run only by a single administrator.
B) They have the power to regulate but not implement laws.
C) They can become specialists in a particular area of regulation.
D) They are always administered by a committee.

Answer 2

C

Question 3

The power of a regulatory agency to fix the prices that a business may charge is known as _____.

A) rate-making power
B) licensing power
C) power over business practices
D) liability power

Answer 3

A

Question 4

Regulatory agencies are also called social regulatory agencies.

Question 5

Price fixing, group boycotts, and horizontal territorial restraints are known as anti-trust violations.

Question 6

The Robinson-Patman Act prohibits sales at unreasonably low prices.

Question 7

Which of the following is true of The Water Pollution and Control Act?

A) It cannot block or overrule the issuance of permits under the law.
B) It sets limits on discharges, including pollutants into sewer systems.
C) It prevents citizens from filing criminal claims.
D) It regulates the generation, storage, and transportation of hazardous waste.

Question 8

The Federal Trade Commission and the Environmental Protection Agency are examples of _____ agencies.

A) nonregulatory
B) regulatory
C) nonadministrative
D) private

Question 9

The Resource Conservation and Recovery Act is responsible for preventing the illegal discharge of pollutants into interstate and navigable waters.

Question 10

Regulatory agencies can use the licensing power to:

A) regulate prices that a business may charge.
B) determine whether the activity of the entity regulated is acceptable or not.
C) allow a business to enter the field being regulated.
D) enable a business to enlist in the stock exchange.

Question 11

The Resource Conservation and Recovery Act was enacted for:

A) restoring and maintaining the proper chemistry of U.S. waters, including adjacent wetlands.
B) setting minimum national standards for air quality and regulates hazardous air pollutants.
C) setting limits on discharges, including pollutants into sewer systems.
D) regulating the generation, storage, transportation, treatment, and disposal of hazardous waste.

Question 12

Government regulates business by means of antitrust laws that seek to promote competition among businesses.

Question 13

Private citizens are entitled to sue on the basis of the Water Pollution and Control Act.

Question 14

The purpose of antitrust laws is to:

A) promote competition among businesses.
B) promote a monopoly for flourishing businesses.
C) provide legal exceptions for businesses that are flourishing.
D) promote restraint of trade within the state.

Question 15

Which of the following is true of government regulation of business?

A) Government regulations only affect the operation of certain businesses.
B) Government regulations do not affect product prices.
C) Government regulations are used to eliminate abuse in business.
D) Government regulations are used to improve quality of life for only certain sections of society.

Question 16

Administrative agencies primarily set policy through the issuance of rules and regulations.

Question 17

Administrative agencies cannot hire scientists and researchers to study industries on their own accord.

Question 18

Define regulatory and nonregulatory administrative agencies.

Question 19

Generally, it is the activity itself, not its effect, which is the most important element in deciding whether the Sherman Act has been violated.

Question 20

Activities that are illegal regardless of their effect are known as _____.

A) per se violations
B) multiple-party violations
C) compensatory violations
D) antitrust violations