Question 1

The practice of requiring a consumer to purchase two or more products together,rather than separately is called ________.

Accepted Answer

A) free-riding 
B) cartelling 
C) tie-in sales 
D) predatory pricing 
A) free-riding 
B) cartelling 
C) tie-in sales 
D) predatory pricing C

Question 2

Recall the application about the two main providers of satellite radio,Sirius and XM,their costs and profitability.Which of the following is a barrier to entry in the satellite radio industry?

Accepted Answer

A) high fixed costs 
B) too many subscribers 
C) high monthly charges to consumers 
D) too much competition 
A) high fixed costs 
B) too many subscribers 
C) high monthly charges to consumers 
D) too much competition A

Question 3

What is a trust?

Accepted Answer

A trust is an arrangement in which the owners of independent firms agree to transfer their decision-making powers to a group of trustees.

Question 4

A horizontal merger:

Accepted Answer

A) occurs when two firms that produce similar products combine their operations. 
B) will never be opposed by the U.S.government but a vertical merger will. 
C) always results in a loss of efficiency in a market. 
D) involves two firms at different stages of the production process. 
A) occurs when two firms that produce similar products combine their operations. 
B) will never be opposed by the U.S.government but a vertical merger will. 
C) always results in a loss of efficiency in a market. 
D) involves two firms at different stages of the production process.

Question 5

Tie-in sales refers to the business practice of charging different prices to different groups of consumers based on their willingness-to-pay.

Accepted Answer

A) True 
 B)False

Question 6

Which government agency was created in 1914 to enforce antitrust laws?

Accepted Answer

A) the Department of Justice 
B) the Federal Reserve System 
C) the Financial Regulatory Committee 
D) the Federal Trade Commission 
A) the Department of Justice 
B) the Federal Reserve System 
C) the Financial Regulatory Committee 
D) the Federal Trade Commission

Question 7

-Refer to Figure 13.1.The type of firm pictured is a:

Accepted Answer

A) patent monopoly. 
B) natural monopoly. 
C) strategic resource monopoly. 
D) government franchise monopoly. 
A) patent monopoly. 
B) natural monopoly. 
C) strategic resource monopoly. 
D) government franchise monopoly.

Question 8

The Clayton Act outlawed specific practices that discourage competition.

Accepted Answer

A) True 
 B)False

Question 9

Natural monopoly is characterized by:

Accepted Answer

A) decreasing average total cost and a long-run average cost curve being positively sloped and steep. 
B) decreasing average total cost and low and increasing marginal cost. 
C) decreasing average total cost and a long-run average cost curve being negatively sloped and steep. 
D) increasing average total cost and large and increasing marginal cost. 
A) decreasing average total cost and a long-run average cost curve being positively sloped and steep. 
B) decreasing average total cost and low and increasing marginal cost. 
C) decreasing average total cost and a long-run average cost curve being negatively sloped and steep. 
D) increasing average total cost and large and increasing marginal cost.

Question 10

A trust is an arrangement where the owners of several firms attempt to drive each other out of business by lowering their prices.

Accepted Answer

A) True 
 B)False

Question 11

The Sherman Act:

Accepted Answer

A) was passed in 1890. 
B) declared monopoly and trade restraints legal. 
C) contained clear language. 
D) all of the above 
A) was passed in 1890. 
B) declared monopoly and trade restraints legal. 
C) contained clear language. 
D) all of the above

Question 12

One possible benefit from a merger is that the new firm could consolidate production,marketing,and a administrative operations,leading to lower the production average costs.

Accepted Answer

A) True 
 B)False

Question 13

The Federal Trade Commission blocked the merger between Office Depot and Staples because there was evidence that the merger would increase competition in the office supplies industry.

Accepted Answer

A) True 
 B)False

Question 14

Under an average-cost pricing policy,a local water company will face the following:

Accepted Answer

A) the local water company chooses the price at which short-run average cost curve intersects the average. 
B) the local water company chooses the price at which long-run average cost curve intersects the average. 
C) the government chooses the price at which the demand curve intersects the short-run marginal-cost curve 
D) the government chooses the price at which the demand curve intersects the long-run average-cost curve. 
A) the local water company chooses the price at which short-run average cost curve intersects the average. 
B) the local water company chooses the price at which long-run average cost curve intersects the average. 
C) the government chooses the price at which the demand curve intersects the short-run marginal-cost curve 
D) the government chooses the price at which the demand curve intersects the long-run average-cost curve.

Question 15

If Xerox requires individuals who purchase their copiers to also purchase Xerox toner fluid,then Xerox is engaging in the practice of predatory pricing.

Accepted Answer

A) True 
 B)False

Question 16

Recall the application about laws against predatory pricing,who is responsible for enforcing these types of laws?

Accepted Answer

A) the Federal Reserve Bank 
B) the Federal Trade Commission 
C) the Federal Deposit Insurance 
D) the Federal Antitrust Agency 
A) the Federal Reserve Bank 
B) the Federal Trade Commission 
C) the Federal Deposit Insurance 
D) the Federal Antitrust Agency

Question 17

Which of the following industries is a good example of a natural monopoly?

Accepted Answer

A) water systems 
B) operating system software 
C) military equipment sold to the federal government 
D) none of the above 
A) water systems 
B) operating system software 
C) military equipment sold to the federal government 
D) none of the above

Question 18

When Interstate Bakeries tried to buy the maker of Wonder Bread:

Accepted Answer

A) the government concluded that the merger would not significantly affect the price of bread. 
B) the two brands of bread were determined to be close substitutes. 
C) the Federal Trade Commission believed that the merger was a good idea because the combined firm would face lower costs and the cost savings could be passed to consumers in the form of lower prices. 
D) the government concluded that the merger would reduce tax receipts paid to state governments,and therefore blocked the merger attempt. 
A) the government concluded that the merger would not significantly affect the price of bread. 
B) the two brands of bread were determined to be close substitutes. 
C) the Federal Trade Commission believed that the merger was a good idea because the combined firm would face lower costs and the cost savings could be passed to consumers in the form of lower prices. 
D) the government concluded that the merger would reduce tax receipts paid to state governments,and therefore blocked the merger attempt.

Question 19

The government often deregulates natural monopolies.

Accepted Answer

A) True 
 B)False

Question 20

What is a merger?

Accepted Answer

A merger is a proces

The practice of requiring a consumer to purchase two or more products together,rather than separately is called ________.

Recall the application about the two main providers of satellite radio,Sirius and XM,their costs and profitability.Which of the following is a barrier to entry in the satellite radio industry?

What is a trust?

A horizontal merger:

Tie-in sales refers to the business practice of charging different prices to different groups of consumers based on their willingness-to-pay.

Which government agency was created in 1914 to enforce antitrust laws?

-Refer to Figure 13.1.The type of firm pictured is a:

The Clayton Act outlawed specific practices that discourage competition.

Natural monopoly is characterized by:

A trust is an arrangement where the owners of several firms attempt to drive each other out of business by lowering their prices.

The Sherman Act:

One possible benefit from a merger is that the new firm could consolidate production,marketing,and a administrative operations,leading to lower the production average costs.

The Federal Trade Commission blocked the merger between Office Depot and Staples because there was evidence that the merger would increase competition in the office supplies industry.

Under an average-cost pricing policy,a local water company will face the following:

If Xerox requires individuals who purchase their copiers to also purchase Xerox toner fluid,then Xerox is engaging in the practice of predatory pricing.

Recall the application about laws against predatory pricing,who is responsible for enforcing these types of laws?

Which of the following industries is a good example of a natural monopoly?

When Interstate Bakeries tried to buy the maker of Wonder Bread:

The government often deregulates natural monopolies.

What is a merger?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 13: Controlling Market Power: Antitrust and Regulation

The practice of requiring a consumer to purchase two or more products together,rather than separately is called ________.

Recall the application about the two main providers of satellite radio,Sirius and XM,their costs and profitability.Which of the following is a barrier to entry in the satellite radio industry?

What is a trust?

A horizontal merger:

Tie-in sales refers to the business practice of charging different prices to different groups of consumers based on their willingness-to-pay.

Which government agency was created in 1914 to enforce antitrust laws?

-Refer to Figure 13.1.The type of firm pictured is a:

The Clayton Act outlawed specific practices that discourage competition.

Natural monopoly is characterized by:

A trust is an arrangement where the owners of several firms attempt to drive each other out of business by lowering their prices.

The Sherman Act:

One possible benefit from a merger is that the new firm could consolidate production,marketing,and a administrative operations,leading to lower the production average costs.

The Federal Trade Commission blocked the merger between Office Depot and Staples because there was evidence that the merger would increase competition in the office supplies industry.

Under an average-cost pricing policy,a local water company will face the following:

If Xerox requires individuals who purchase their copiers to also purchase Xerox toner fluid,then Xerox is engaging in the practice of predatory pricing.

Recall the application about laws against predatory pricing,who is responsible for enforcing these types of laws?

Which of the following industries is a good example of a natural monopoly?

When Interstate Bakeries tried to buy the maker of Wonder Bread:

The government often deregulates natural monopolies.

What is a merger?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters