Question 1

Dominant firms that formed in several industries in the U.S. in the 1870s and 1880s, which assigned control to a single decision group, were referred to as

Accepted Answer

A)  trusts.
B)  mergers.
C)  tying contracts.
D)  single-seller monopoly.E) A) and D)
F) None of the above

Question 2

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation) except the

Accepted Answer

A)  Food and Drug Administration.
B)  Federal Energy Regulatory Commission.
C)  Federal Communications Commission.
D)  50 state public utility commissions.E) A) and D)
F) A) and C)

Question 3

An example of a horizontal merger is one between an airline and

Accepted Answer

A)  a chain of hotels.
B)  another airline.
C)  an aluminum company.
D)  a car rental company.E) A) and D)
F) A) and C)

Question 4

Social regulation consists of regulating the behavior of people in society in order to promote the safety and harmony in neighborhoods.

Accepted Answer

A) True 
 B)False

Question 5

The antitrust laws are enforced by the

Accepted Answer

A)  Federal Bureau of Investigation.
B)  Antimonopoly Court of Appeals.
C)  Federal Justice Department and the Federal Trade Commission.
D)  Department of Commerce.E) All of the above
F) B) and C)

Question 6

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 7

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 1 in Alpha and Firm 2 in Delta would be a

Accepted Answer

A)  vertical merger.
B)  horizontal merger.
C)  conglomerate merger.
D)  diagonal merger.E) C) and D)
F) B) and D)

Question 8

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) A) and B)
F) C) and D)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil

Accepted Answer

A)  guilty of tax evasion for merger activity.
B)  not guilty of tax evasion for merger activity.
C)  guilty of monopolizing the petroleum industry.
D)  not guilty of monopolizing the petroleum industry.E) All of the above
F) A) and D)

Question 11

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 2 in Alpha and Firm 3 in Beta would be a

Accepted Answer

A)  conglomerate merger.
B)  vertical merger.
C)  diagonal merger.
D)  horizontal merger.E) C) and D)
F) A) and B)

Question 12

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 D)
F) C) and D)

Question 13

Unfair advertising practices are investigated by the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 14

The Celler-Kefauver Act outlawed interlocking directorates.

Accepted Answer

A) True 
 B)False

Question 15

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) A) and C)
F) B) and C)

Question 16

In antitrust law, "price-fixing" refers to

Accepted Answer

A)  the government fixing the prices of products of antitrust violators.
B)  a company fixing the price of its own product regardless of the degree of competition.
C)  competitors colluding to set their prices collectively.
D)  a company paying its suppliers a fixed price for certain inputs.E) B) and C)
F) B) and D)

Question 17

Over the years since the early 1900s, the U.S. government's and courts' aggressiveness in interpreting and enforcing antitrust laws have

Accepted Answer

A)  been generally increasing.
B)  mostly been quite lax.
C)  fluctuated between tough and lax.
D)  been declining.E) A) and C)
F) A) and B)

Question 18

The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too little capital in the production process.

Accepted Answer

A) True 
 B)False

Question 19

Congressional representatives have called for extensive ergonomics regulations to reduce strains and injuries from repetitive activities by workers. Such regulation, if passed, would be a good example of

Accepted Answer

A)  industrial regulation.
B)  the principal-agent problem.
C)  the free-rider problem.
D)  social regulation.E) A) and B)
F) B) and D)

Question 20

Price-fixing is considered to be a per se violation of the antitrust laws because

Accepted Answer

A)  a guilty verdict requires proof of injury to consumers.
B)  a guilty verdict requires proof of injury to other competitors.
C)  the rule of reason is applicable.
D)  a guilty verdict need only show that there was a conspiracy to fix prices, not that it succeeded.E) B) and C)
F) A) and C)

Exam 21: Antitrust Policy and Regulation

Congressional representatives have called for extensive ergonomics regulations to reduce strains and injuries from repetitive activities by workers. Such regulation, if passed, would be a good example of

Correct AnswerverifiedShow Answer

Unfair advertising practices are investigated by the Federal Trade Commission.

Correct AnswerverifiedShow Answer

Over the years since the early 1900s, the U.S. government's and courts' aggressiveness in interpreting and enforcing antitrust laws have

Correct AnswerverifiedShow Answer

Social regulation consists of regulating the behavior of people in society in order to promote the safety and harmony in neighborhoods.

Correct AnswerverifiedShow Answer

The antitrust laws are enforced by the

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil

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

An example of a horizontal merger is one between an airline and

Correct AnswerverifiedShow Answer

The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too little capital in the production process.

Correct AnswerverifiedShow Answer

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 1 in Alpha and Firm 2 in Delta would be a

Correct AnswerverifiedShow Answer

Dominant firms that formed in several industries in the U.S. in the 1870s and 1880s, which assigned control to a single decision group, were referred to as

Correct AnswerverifiedShow Answer

The Celler-Kefauver Act outlawed interlocking directorates.

Correct AnswerverifiedShow Answer

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation) except the

Correct AnswerverifiedShow Answer

Price-fixing is considered to be a per se violation of the antitrust laws because

Correct AnswerverifiedShow Answer

In antitrust law, "price-fixing" refers to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. A merger between Firm 2 in Alpha and Firm 3 in Beta would be a

Correct AnswerverifiedShow Answer

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