Question 1

Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists is socially acceptable.

Accepted Answer

A) True 
 B)False

Question 2

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) All of the above

Question 3

If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct.This situation would be an example of

Accepted Answer

A)  the rule of reason.
B)  a cease-and-desist order.
C)  a per se violation.
D)  tying contracts.E) B) and D)
F) None of the above

Question 4

One main difference in the rulings on the 1945 Alcoa case and the 1956 DuPont cellophane case is that the Alcoa case

Accepted Answer

A)  focused on structure, whereas the DuPont case focused on behavior.
B)  focused on behavior, whereas the DuPont case focused on structure.
C)  defined the market broadly, whereas the DuPont case defined the market narrowly.
D)  defined the market narrowly, whereas the DuPont case defined the market broadly.E) C) and D)
F) A) and B)

Question 5

The merger of a firm in one industry with another firm in the same industry that sells similar products is called a

Accepted Answer

A)  vertical merger.
B)  secondary merger.
C)  horizontal merger.
D)  conglomerate merger.E) All of the above
F) B) and C)

Question 6

A merger between a maker of household detergents and a fast-food chain would be an example of

Accepted Answer

A)  a horizontal merger.
B)  an interlocking directorate.
C)  a conglomerate merger.
D)  a tying contract.E) C) and D)
F) A) and D)

Question 7

The so-called rule of reason in interpreting antitrust legislation suggests that the application of antitrust laws should be based on industry

Accepted Answer

A)  efficiency.
B)  concentration ratios.
C)  behavior.
D)  structure.E) B) and C)
F) A) and D)

Question 8

The degree of strictness in the enforcement of antitrust laws often depends on

Accepted Answer

A)  political appointments.
B)  the rule of reason.
C)  use of the Herfindahl index.
D)  per se violations.E) A) and B)
F) None of the above

Question 9

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Accepted Answer

A)  the Alcoa case and the Microsoft case
B)  the U.S.Steel case and the Alcoa case
C)  the DuPont cellophane case and the U.S.Steel case
D)  the U.S.Steel case and the Microsoft caseE) None of the above
F) A) and B)

Question 10

The antitrust laws are based on the

Accepted Answer

A)  creative destruction view of competition.
B)  idea that competition leads to greater economic efficiency than does a monopoly.
C)  view that nonprice competition should be strictly regulated by government.
D)  view that all negative externalities should be eliminated by government action.E) C) and D)
F) A) and D)

Question 11

The main purpose of industrial regulation is to

Accepted Answer

A)  lower price to marginal cost.
B)  lower price to average total cost such that the firm earns a fair return.
C)  break monopolies into competing firms.
D)  reduce X-inefficiency.E) B) and C)
F) All of the above

Question 12

The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a

Accepted Answer

A)  dominant firm oligopoly.
B)  structured market.
C)  natural monopoly.
D)  trust.E) A) and D)
F) None of the above

Question 13

The decision in the U.S.Steel case

Accepted Answer

A)  reflected a behavioralist approach to antitrust.
B)  reflected a structuralist approach to antitrust.
C)  divided U.S.Steel into a number of smaller companies.
D)  ruled that U.S.Steel had engaged in illegal price-fixing.E) None of the above
F) A) and D)

Question 14

An industry has five firms, each with a market share of 20 percent.There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy.If two of the firms in the industry seek to merge, this action would most likely be opposed by the government because the Herfindahl index for the industry is

Accepted Answer

A)  2,000 and the merger would increase the index by 500.
B)  2,000 and the merger would increase the index by 800.
C)  2,500 and the merger would increase the index by 500.
D)  2,500 and the merger would increase the index by 1,200.E) A) and D)
F) None of the above

Question 15

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).Topic: Antitrust Policy: Issues and Impacts
Topic: The Antitrust Laws

Accepted Answer

A) True 
 B)False

Question 16

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 1890E) B) and D)
F) C) and D)

Question 17

A caption that could serve as a retort to opponents of social regulation would be

Accepted Answer

A)  "There is no free lunch."
B)  "You can't push on a string."
C)  "Less government is not always better."
D)  "Restraints of trade must be outlawed."E) C) and D)
F) A) and D)

Question 18

A conglomerate merger

Accepted Answer

A)  can extend the line of products sold, extend the territories in which products are sold, or combine totally unrelated products.
B)  is defined as a merger involving two firms that previously had a buyer-seller relationship.
C)  is defined as a merger involving two firms producing the same or similar products and selling them in the same geographical market.
D)  is illegal, per se.E) None of the above
F) B) and D)

Question 19

The idea that competition is in some circumstances insufficient to achieve allocative efficiency and ensure fairness to consumers and competing firms is most closely associated with which antitrust perspective?

Accepted Answer

A)  laissez-faire
B)  Herfindahl
C)  passive
D)  activeE) B) and D)
F) B) and C)

Question 20

What development in the 1970s and 1980s is considered one of the most extensive experiments in industrial policy in the last half-century?

Accepted Answer

A)  extensive antitrust enforcement
B)  increased breakups of monopolies
C)  deregulation of industries
D)  fostering natural monopoliesE) None of the above
F) All of the above

Exam 21: Antitrust Policy and Regulation

The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a

Correct Answer
verified

The idea that competition is in some circumstances insufficient to achieve allocative efficiency and ensure fairness to consumers and competing firms is most closely associated with which antitrust perspective?

Correct Answer
verified

The decision in the U.S.Steel case

Correct Answer
verified

The antitrust laws are based on the

Correct Answer
verified

The so-called rule of reason in interpreting antitrust legislation suggests that the application of antitrust laws should be based on industry

Correct Answer
verified

The degree of strictness in the enforcement of antitrust laws often depends on

Correct Answer
verified

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Correct Answer
verified

Correct Answer
verified

Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists is socially acceptable.

Correct Answer
verified

The main purpose of industrial regulation is to

Correct Answer
verified

A merger between a maker of household detergents and a fast-food chain would be an example of

Correct Answer
verified

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

Correct Answer
verified

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).Topic: Antitrust Policy: Issues and Impacts Topic: The Antitrust Laws

Correct Answer
verified

What development in the 1970s and 1980s is considered one of the most extensive experiments in industrial policy in the last half-century?

Correct Answer
verified

The merger of a firm in one industry with another firm in the same industry that sells similar products is called a

Correct Answer
verified

If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct.This situation would be an example of

Correct Answer
verified

One main difference in the rulings on the 1945 Alcoa case and the 1956 DuPont cellophane case is that the Alcoa case

Correct Answer
verified

A caption that could serve as a retort to opponents of social regulation would be

Correct Answer
verified

A conglomerate merger

Correct Answer
verified

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
verified

Exam 21: Antitrust Policy and Regulation

The situation where a single firm can supply the product to an entire market at a lower unit cost than if the market were split among a number of competing firms, is called a

Correct AnswerverifiedShow Answer

The idea that competition is in some circumstances insufficient to achieve allocative efficiency and ensure fairness to consumers and competing firms is most closely associated with which antitrust perspective?

Correct AnswerverifiedShow Answer

The decision in the U.S.Steel case

Correct AnswerverifiedShow Answer

The antitrust laws are based on the

Correct AnswerverifiedShow Answer

The so-called rule of reason in interpreting antitrust legislation suggests that the application of antitrust laws should be based on industry

Correct AnswerverifiedShow Answer

The degree of strictness in the enforcement of antitrust laws often depends on

Correct AnswerverifiedShow Answer

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists is socially acceptable.

Correct AnswerverifiedShow Answer

The main purpose of industrial regulation is to

Correct AnswerverifiedShow Answer

A merger between a maker of household detergents and a fast-food chain would be an example of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).Topic: Antitrust Policy: Issues and Impacts Topic: The Antitrust Laws

Correct AnswerverifiedShow Answer

What development in the 1970s and 1980s is considered one of the most extensive experiments in industrial policy in the last half-century?

Correct AnswerverifiedShow Answer

The merger of a firm in one industry with another firm in the same industry that sells similar products is called a

Correct AnswerverifiedShow Answer

If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct.This situation would be an example of

Correct AnswerverifiedShow Answer

One main difference in the rulings on the 1945 Alcoa case and the 1956 DuPont cellophane case is that the Alcoa case

Correct AnswerverifiedShow Answer

A caption that could serve as a retort to opponents of social regulation would be

Correct AnswerverifiedShow Answer

A conglomerate merger

Correct AnswerverifiedShow Answer

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

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