Question 1

The Consumer Product Safety Commission engages in social regulation,rather than industrial regulation.

Accepted Answer

A) True 
 B)False

Question 2

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Accepted Answer

A) True 
 B)False

Question 3

Answer the question on the basis of the following table showing market shares of firms in hypothetical industries.Assume these are distinct industries with no buyer-seller relationships or competition among them.   Market Share of Firms in Industry \begin{array}{c}&&	ext { Market Share of Firms in Industry }\end{array}​​ Market Share of Firms in Industry ​ 
 IndustryAlphaBetaCappaDelta12345630302020−−−−8010531125252525−−−−202020201010\begin{array}{c}\begin{array}{lll}\Industry\Alpha\Beta\Cappa\Delta\\end{array}\begin{array}{lll}\1&2&3&4&5&6\30&30&20&20&--&--\80&10&5&3&1&1\25&25&25&25&--&--\20&20&20&20&10&10\end{array}\end{array}IndustryAlphaBetaCappaDelta​130802520​230102520​32052520​42032520​5−−1−−10​6−−1−−10​​  Refer to the table.The industry with the greatest market power as measured by the Herfindahl index is:

Accepted Answer

A)   Alpha.
B)   Beta.
C)   Cappa.
D)   Delta. E) A) and D)
F) All of the above

Question 4

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Accepted Answer

A)   Celler-Kefauver Act of 1950.
B)   Wheeler-Lea Act of 1938.
C)   Clayton Act of 1914.
D)   Sherman Act of 1890.E) A) and D)
F) B) and C)

Question 5

Critics of industrial regulation say that such regulation:

Accepted Answer

A)   benefits small firms at the expense of large firms.
B)   perpetuates monopoly long after new technology has eroded natural monopoly.
C)   creates insurmountable principal-agent problems.
D)   has resulted mainly from the paradox of voting.E) A) and C)
F) All of the above

Question 6

A vertical merger involves a combining of one or more firms:

Accepted Answer

A)   as the result of one firm purchasing the assets of the other.
B)   that are operating in entirely different industries.
C)   operating at different stages of the production process in a particular industry.
D)   operating at the same stage of the production process.E) A) and B)
F) None of the above

Question 7

Responsibility for enforcing the antitrust laws rests:

Accepted Answer

A)   with the Interstate Commerce Commission.
B)   with both the Department of Justice and the Federal Trade Commission.
C)   solely with the Federal Trade Commission.
D)   solely with the Department of Justice.E) B) and C)
F) A) and B)

Question 8

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Accepted Answer

A)   has been a clear failure.
B)   is neutral in its impact to society's well-being,creating minimal net benefits at best.
C)   has produced large net benefits for consumers and society.
D)   has produced sizable efficiency gains in the communications industry,but not in the transportation industry (railways,trucking,airlines) .E) A) and D)
F) B) and C)

Question 9

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

Accepted Answer

A)   would reduce product price.
B)   would increase product price.
C)   might either increase product price or reduce product price.
D)   will reduce average total cost.E) C) and D)
F) All of the above

Question 10

Which of the following is characteristic of a regulated natural monopoly?

Accepted Answer

A)   Extensive economies of scale.
B)   The wasteful duplication of capital facilities in the event of competition.
C)   The provision of an essential service.
D)   All of these.E) B) and D)
F) A) and B)

Question 11

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Accepted Answer

A)   Sherman Act,Section 1.
B)   Sherman Act,Section 2.
C)   Clayton Act.
D)   Federal Trade Commission Act.E) A) and B)
F) A) and C)

Question 12

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Accepted Answer

A)   Competitive firms A,B,and C meet and agree to charge a common price.
B)   Competitive firms D and E,each with 35 percent market shares,merge into a single firm.
C)   Competitive firms F and G independently charge lower prices to frequent customers than to occasional customers.
D)   Large dominant firm H forces buyers to purchase its product X in order to buy its popular product Y.E) A) and B)
F) A) and C)

Question 13

The Alcoa case:

Accepted Answer

A)   supported the structuralist approach to antitrust.
B)   struck down the treble damages provision of the antitrust laws.
C)   called for federal regulation of any industry with a four-firm concentration ratio in excess of 50 percent.
D)   decision was consistent with a behavioralist approach.E) A) and C)
F) All of the above

Question 14

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

Accepted Answer

A)   horizontal market.
B)   natural monopoly.
C)   contestable market.
D)   perfect market.E) A) and B)
F) A) and C)

Question 15

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Accepted Answer

A)   Celler-Kefauver Act of 1950.
B)   Wheeler-Lea Act of 1938.
C)   Clayton Act of 1914.
D)   Sherman Act of 1890.E) All of the above
F) C) and D)

Question 16

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

Accepted Answer

A)   price-fixing.
B)   an interlocking directive.
C)   a tying contract.
D)   price discrimination.E) C) and D)
F) A) and B)

Question 17

Critics of industrial regulation say that such regulation:

Accepted Answer

A)   contributes to X-inefficiency.
B)   benefits small firms at the expense of large firms.
C)   creates insurmountable principal-agent problems.
D)   suffers from the free-rider problem.E) B) and D)
F) None of the above

Question 18

Economists who adhere to the laissez-faire antitrust perspective:

Accepted Answer

A)   view competition as a long-run dynamic process in which firms battle for dominance of markets but rarely can sustain such dominance once it is achieved.
B)   believe the antitrust laws are as important today as they were when they were passed in the early 1900s.
C)   say that an industry's structure,which is based on economies of scale,usually predicts the behavior of the industry firms.
D)   contend that large,dominant firms should be broken into smaller competitive firms and then government should stand back and let competition prevail.E) A) and B)
F) A) and D)

Question 19

The U.S.Justice Department,the Federal Trade Commission,state attorneys general,and injured private parties can independently file charges against firms under the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

Accepted Answer

A)   Celler-Kefauver Act of 1950.
B)   Wheeler-Lea Act of 1938.
C)   Clayton Act of 1914.
D)   Sherman Act of 1890.E) None of the above
F) C) and D)

Exam 20: Antitrust Policy and Regulation

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

Correct Answer
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Correct Answer
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Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Correct Answer
verified

A vertical merger involves a combining of one or more firms:

Correct Answer
verified

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Correct Answer
verified

The U.S.Justice Department,the Federal Trade Commission,state attorneys general,and injured private parties can independently file charges against firms under the Sherman Act.

Correct Answer
verified

Critics of industrial regulation say that such regulation:

Correct Answer
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Economists who adhere to the laissez-faire antitrust perspective:

Correct Answer
verified

Critics of industrial regulation say that such regulation:

Correct Answer
verified

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Correct Answer
verified

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

Correct Answer
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Responsibility for enforcing the antitrust laws rests:

Correct Answer
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The Alcoa case:

Correct Answer
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Which of the following is characteristic of a regulated natural monopoly?

Correct Answer
verified

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

Correct Answer
verified

The Consumer Product Safety Commission engages in social regulation,rather than industrial regulation.

Correct Answer
verified

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

Correct Answer
verified

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Correct Answer
verified

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Correct Answer
verified

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Correct Answer
verified

Exam 20: Antitrust Policy and Regulation

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Correct AnswerverifiedShow Answer

A vertical merger involves a combining of one or more firms:

Correct AnswerverifiedShow Answer

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Correct AnswerverifiedShow Answer

The U.S.Justice Department,the Federal Trade Commission,state attorneys general,and injured private parties can independently file charges against firms under the Sherman Act.

Correct AnswerverifiedShow Answer

Critics of industrial regulation say that such regulation:

Correct AnswerverifiedShow Answer

Economists who adhere to the laissez-faire antitrust perspective:

Correct AnswerverifiedShow Answer

Critics of industrial regulation say that such regulation:

Correct AnswerverifiedShow Answer

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Correct AnswerverifiedShow Answer

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

Correct AnswerverifiedShow Answer

Responsibility for enforcing the antitrust laws rests:

Correct AnswerverifiedShow Answer

The Alcoa case:

Correct AnswerverifiedShow Answer

Which of the following is characteristic of a regulated natural monopoly?

Correct AnswerverifiedShow Answer

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

Correct AnswerverifiedShow Answer

The Consumer Product Safety Commission engages in social regulation,rather than industrial regulation.

Correct AnswerverifiedShow Answer

Using antitrust law to split up an unregulated natural monopoly into several competing firms:

Correct AnswerverifiedShow Answer

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Correct AnswerverifiedShow Answer

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Correct AnswerverifiedShow Answer

Overall,economists believe that deregulation of industries formerly subjected to industrial regulation:

Correct AnswerverifiedShow Answer

Correct Answer
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