Question 1

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 on 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) B) and C)
F) None of the above C

Question 2

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

Question 3

All of the following can file antitrust charges under the Sherman Act except

Accepted Answer

A)  the U.S. Justice Department.
B)  state attorneys general.
C)  injured private parties.
D)  the Federal Energy Regulatory Commission.E) B) and C)
F) All of the above

Question 4

The largest efficiency gains from deregulation have occurred in the

Accepted Answer

A)  natural gas and cable television industries.
B)  cable television and railroad industries.
C)  communications and stock-brokering industries.
D)  airlines, trucking, and railroad industries.E) A) and B)
F) None of the above

Question 5

The table shows market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. The industry with the greatest market power as measured by the Herfindahl index is

Accepted Answer

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

Question 6

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) A) and D)
F) None of the above

Question 7

Supporters of social regulation contend that it has provided net benefits to society in the form of greater safety, a better environment, and less discrimination.

Accepted Answer

A) True 
 B)False

Question 8

The administrative agency charged with enforcing the provisions of the Clayton Act (1914) was established by additional legislation in the same year. This legislation was the

Accepted Answer

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

Question 9

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) A) and C)
F) All of the above

Question 10

Where there is natural monopoly, government is most likely to implement

Accepted Answer

A)  social regulation.
B)  antitrust policy.
C)  industrial regulation.
D)  an externality containment policy.E) A) and C)
F) A) and B)

Question 11

The decision on the DuPont cellophane case of 1956 dealt with the issue of

Accepted Answer

A)  unfair advertising practices.
B)  determining the relevant market for a particular product.
C)  DuPont's ownership of General Motors stock.
D)  price-fixing in the chemical industry.E) A) and D)
F) B) and D)

Question 12

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) A) and D) D

Question 13

Why are horizontal mergers more likely to be opposed than vertical and conglomerate mergers?

Accepted Answer

The U.S. government uses Section 7 of th...

Question 14

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) C) and D)
F) None of the above

Question 15

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) C) and D)

Question 16

What are four criticisms of social regulation?

Accepted Answer

There are several criticisms of social r...

Question 17

Which theory of regulation assumes that the industry wants to be regulated, in order to reduce competition and achieve cartel-like conditions?

Accepted Answer

A)  public interest theory
B)  legal cartel theory
C)  price-fixing theory
D)  public ownership theoryE) B) and D)
F) B) and C)

Question 18

If the government regulates a natural monopoly and sets a "fair return" pricing policy, then the regulated firm will have greater incentive to improve its operating efficiency.

Accepted Answer

A) True 
 B)False

Question 19

The Occupational Safety and Health Administration is mainly involved in

Accepted Answer

A)  industrial regulation.
B)  social regulation.
C)  antitrust regulation.
D)  public utility regulation.E) B) and C)
F) C) and D)

Question 20

If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on having a monopoly structure will increase.

Accepted Answer

A) True 
 B)False  False

Exam 21: Antitrust Policy and Regulation

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

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

All of the following can file antitrust charges under the Sherman Act except

Correct AnswerverifiedShow Answer

The largest efficiency gains from deregulation have occurred in the

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. The industry with the greatest market power as measured by the Herfindahl index is

Correct AnswerverifiedShow Answer

Responsibility for enforcing the antitrust laws rests

Correct AnswerverifiedShow Answer

Supporters of social regulation contend that it has provided net benefits to society in the form of greater safety, a better environment, and less discrimination.

Correct AnswerverifiedShow Answer

The administrative agency charged with enforcing the provisions of the Clayton Act (1914) was established by additional legislation in the same year. This legislation was the

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

Where there is natural monopoly, government is most likely to implement

Correct AnswerverifiedShow Answer

The decision on the DuPont cellophane case of 1956 dealt with the issue of

Correct AnswerverifiedShow Answer

A major shortcoming of the Sherman Act was that

Correct AnswerverifiedD

Why are horizontal mergers more likely to be opposed than vertical and conglomerate mergers?

Correct AnswerverifiedThe U.S. government uses Section 7 of th...View AnswerShow 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

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

What are four criticisms of social regulation?

Correct AnswerverifiedThere are several criticisms of social r...View AnswerShow Answer

Which theory of regulation assumes that the industry wants to be regulated, in order to reduce competition and achieve cartel-like conditions?

Correct AnswerverifiedShow Answer

If the government regulates a natural monopoly and sets a "fair return" pricing policy, then the regulated firm will have greater incentive to improve its operating efficiency.

Correct AnswerverifiedShow Answer

The Occupational Safety and Health Administration is mainly involved in

Correct AnswerverifiedShow Answer

If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on having a monopoly structure will increase.

Correct AnswerverifiedFalse

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C

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D

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The U.S. government uses Section 7 of th...
View Answer

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There are several criticisms of social r...
View Answer

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False