Question 1

Which of the following is mainly involved in social regulation?

Accepted Answer

A)  the Social Security Administration
B)  the Federal Communications Commission
C)  the Food and Drug Administration
D)  the Interstate Commerce CommissionE) None of the above
F) A) and B)

Question 2

A criticism of social regulation is that it

Accepted Answer

A)  contributes to the growth of natural monopoly.
B)  increases the rate of innovation in the economy.
C)  decreases the influence of the Federal government on business.
D)  results in many unintended and costly side effects.E) A) and C)
F) B) and C)

Question 3

Which one of the following is concerned with industrial regulation, as distinct from social regulation?

Accepted Answer

A)  Occupational Safety and Health Administration
B)  Consumer Products Safety Commission
C)  Federal Communications Commission
D)  Environmental Protection AgencyE) None of the above
F) A) and B)

Question 4

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 5

The sum of the squared values of market shares of firms in an industry is referred to as the

Accepted Answer

A)  concentration ratio.
B)  Herfindahl index.
C)  variance value.
D)  antitrust index.E) All of the above
F) B) and D)

Question 6

The view that the antitrust laws should be enforced relatively leniently because of the tendency for monopoly power to erode over time is known as the

Accepted Answer

A)  structuralist view of antitrust.
B)  behavioralist view of antitrust.
C)  laissez-faire perspective on antitrust.
D)  active antitrust perspective.E) A) and D)
F) A) and C)

Question 7

Supporters of social regulation contend that

Accepted Answer

A)  the existence of natural monopoly requires a regulatory response from government.
B)  there is a pressing need to eliminate price-fixing in U.S.business.
C)  higher costs are the price that must be paid for a better society.
D)  the benefits of public ownership of businesses are greater than the costs.E) A) and B)
F) A) and C)

Question 8

A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company.

Accepted Answer

A) True 
 B)False

Question 9

Anticompetitive price discrimination, interlocking directorates, and tying contracts were banned by the

Accepted Answer

A)  Federal Trade Commission Act.
B)  Clayton Act.
C)  Sherman Act.
D)  Celler-Kefauver Act.E) A) and D)
F) B) and C)

Question 10

The cornerstone of antitrust policy in the United States is generally considered to be the Sherman Antitrust Act of 1890.

Accepted Answer

A) True 
 B)False

Question 11

A labor market application of the legal cartel theory of regulation would be

Accepted Answer

A)  unemployment benefits.
B)  the Full Employment Act.
C)  Equal Employment Opportunities provisions.
D)  occupational licensing.E) None of the above
F) B) and C)

Question 12

The principal objective of industrial regulation is to

Accepted Answer

A)  increase product safety.
B)  promote improvements in the quality of life.
C)  protect the consuming public from the market power of natural monopolies.
D)  solve problems associated with industry, such as the problems of water and air pollution.E) B) and C)
F) A) and C)

Question 13

The legal cartel theory indicates that in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum, government regulation is mandatory and desirable.

Accepted Answer

A) True 
 B)False

Question 14

(Consider This)  According to the Consider This box on catfish and art, which of the following firms were convicted for horizontal price-fixing?

Accepted Answer

A)  Dell and Gateway (personal computer makers) 
B)  Boeing and Airbus (aircraft manufacturers) 
C)  Heinz and Del Monte (food product firms) 
D)  Apple, Harper Collins, and Penguin (e-books) E) A) and B)
F) A) and C)

Question 15

Which one of the following is most likely to increase the Herfindahl index of a particular industry?

Accepted Answer

A)  a conglomerate merger
B)  a vertical merger
C)  a price-fixing arrangement among all the industry firms
D)  a horizontal mergerE) C) and D)
F) A) and D)

Question 16

Which of the following statements is true?

Accepted Answer

A)  The active antitrust perspective believes that competitive market forces will automatically and actively reduce a firm's monopoly power in the long run.
B)  The active antitrust perspective believes that the government should play the role of officials and umpires and enforce the rules of the competitive game.
C)  The laissez-faire perspective views firms as players in a competitive game who will sometimes violate the rules in order to gain a huge advantage over others.
D)  The laissez-faire perspective believes that an active enforcement of antitrust policy is the only way to reduce the monopoly power of giant firms.E) B) and C)
F) All of the above

Question 17

The basic purpose of antitrust laws is to

Accepted Answer

A)  provide subsidies for American business.
B)  limit monopoly power in industry.
C)  control prices to protect consumers.
D)  enforcelaws that restrict competition.E) A) and B)
F) A) and C)

Question 18

Social, as distinct from industrial, regulation is the major focus of the

Accepted Answer

A)  Federal Trade Commission.
B)  Federal Energy Regulatory Commission.
C)  Federal Communications Commission.
D)  Consumer Product Safety Commission.E) C) and D)
F) All of the above

Question 19

The Sherman Act was designed to

Accepted Answer

A)  exempt commercial banks from the antitrust laws.
B)  make interlocking directorates legal.
C)  prohibit misleading and antisocial advertising.
D)  make monopoly and acts that restrain trade illegal.E) A) and B)
F) A) and C)

Question 20

A major shortcoming of the Sherman Act was that

Accepted Answer

A)  it was too specific.
B)  it was never enforced by the courts.
C)  violators of the act were forced out of business.
D)  it did not explicitly state which activities were illegal.E) B) and D)
F) B) and C)

Exam 21: Antitrust Policy and Regulation

Anticompetitive price discrimination, interlocking directorates, and tying contracts were banned by the

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The principal objective of industrial regulation is to

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The cornerstone of antitrust policy in the United States is generally considered to be the Sherman Antitrust Act of 1890.

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A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company.

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A labor market application of the legal cartel theory of regulation would be

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Social, as distinct from industrial, regulation is the major focus of the

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The Sherman Act was designed to

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Which of the following statements is true?

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The sum of the squared values of market shares of firms in an industry is referred to as the

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The legal cartel theory indicates that in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum, government regulation is mandatory and desirable.

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.

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Which of the following is mainly involved in social regulation?

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A major shortcoming of the Sherman Act was that

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The view that the antitrust laws should be enforced relatively leniently because of the tendency for monopoly power to erode over time is known as the

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The basic purpose of antitrust laws is to

Correct AnswerverifiedShow Answer

A criticism of social regulation is that it

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Which one of the following is most likely to increase the Herfindahl index of a particular industry?

Correct AnswerverifiedShow Answer

Which one of the following is concerned with industrial regulation, as distinct from social regulation?

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(Consider This) According to the Consider This box on catfish and art, which of the following firms were convicted for horizontal price-fixing?

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Supporters of social regulation contend that

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