Deck 4: Government Regulation of Business

Question 1

Describe the rule making process followed by federal administrative agencies. ​

Answer 1

After investigating a problem, an agency will develop a proposed rule.   A federal agency must publish a notice of the proposed rule in the Federal Register, which allows interested parties the opportunity to comment on the proposed rule.   An agency may hold formal hearings on the proposed rule, but informal notice and comment rule making has become increasingly common.   After allowing time for comments from the public, the proposed rule may be published as proposed, changed or entirely abandoned by the agency.

Question 2

Regulatory agencies are also called social regulatory agencies.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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 5

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

Question 6

Regulatory agencies can use their 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 7

The Office of Foreign Assets Control (OFAC)is responsible for:

A)enforcing economic sanctions against individuals and entities deemed a threat to national security.
B)regulating public utility companies.
C)setting licensing requirements for professionals in the financial sector.
D)dispensing benefits for social and economic welfare.

Question 8

An agency's power to determine whether the activity of a regulated entity is acceptable or not is an example of:

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

Question 9

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

Question 10

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

A)Government regulations only affect the operation of a small number of 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 11

A state administrative agency affects businesses throughout the country. ​

Question 12

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)seeks to:

A)ensure the cleanup of waste from previous business activities.
B)set minimum standards for air quality.
C)limit discharges, including pollutants, into sewer systems.
D)regulate the generation, storage, transportation, treatment, and disposal of hazardous waste.

Question 13

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.

Question 14

The Robinson-Patman Act prohibits sales at unreasonably low prices in order to eliminate competition.

Question 15

The Water Pollution and Control Act is responsible for preventing the illegal discharge of pollutants into interstate and navigable waters.

Question 16

An antitrust violation occurs when a business firm seeks to have cooperation within its firm to diminish competition.

Question 17

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

Question 18

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 19

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

Question 20

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