Question 1

Over the past two decades anti-trust policy has become:

Accepted Answer

A) more permissive. 
B) more restrictive. 
C) non-existent. 
D) differentiated. 
A) more permissive. 
B) more restrictive. 
C) non-existent. 
D) differentiated.

Question 2

The Herfindahl index is calculated by adding the squared value of the market shares of all the firms in the industry.

Accepted Answer

A) True 
 B)False

Question 3

One reason fewer antitrust cases have been brought before the courts is:

Accepted Answer

A) more and more firms are platform businesses. 
B) globalization has changed the competitive landscape. 
C) goods prices have declined. 
D) consumers have lost political power. 
A) more and more firms are platform businesses. 
B) globalization has changed the competitive landscape. 
C) goods prices have declined. 
D) consumers have lost political power.

Question 4

Oligopoly is characterized by:

Accepted Answer

A) no barriers to entry. 
B) low market concentration. 
C) inability to set price. 
D) few sellers. 
A) no barriers to entry. 
B) low market concentration. 
C) inability to set price. 
D) few sellers.

Question 5

An important way in which globalization changed U.S. antitrust policy is:

Accepted Answer

A) global corporations face stricter policies in foreign countries, allowing the United States to be less active. 
B) global corporations cannot be sued for antitrust violations, keeping U.S. courts from enforcing laws. 
C) Americans hold more shares of international corporations, placing pressure on foreign firms to perform. 
D) foreign governments are more lax when it comes to antitrust laws, putting pressure on the United States to follow. 
A) global corporations face stricter policies in foreign countries, allowing the United States to be less active. 
B) global corporations cannot be sued for antitrust violations, keeping U.S. courts from enforcing laws. 
C) Americans hold more shares of international corporations, placing pressure on foreign firms to perform. 
D) foreign governments are more lax when it comes to antitrust laws, putting pressure on the United States to follow.

Question 6

When government uses the judgment by performance criterion, a firm is considered a monopoly if it controls a significant segment of the market.

Accepted Answer

A) True 
 B)False

Question 7

Refer to the graph shown, which shows an oligopolist facing a kinked demand curve. The firm will not increase price when marginal costs fluctuate between which two points?

Accepted Answer

A) a and b 
B) b and c 
C) c and d 
D) a and d 
A) a and b 
B) b and c 
C) c and d 
D) a and d

Question 8

Suppose there are no barriers to entry in the market for facial tissues, where two brands dominate the industry. According to the theory of contestable markets, the price charged for facial tissues will be:

Accepted Answer

A) far below the cost of producing a box of facial tissue. 
B) far above the cost of producing a box of facial tissue. 
C) roughly equal to the cost of producing a box of facial tissue. 
D) much higher for the number-one-selling brand than it is for the number-two-selling brand. 
A) far below the cost of producing a box of facial tissue. 
B) far above the cost of producing a box of facial tissue. 
C) roughly equal to the cost of producing a box of facial tissue. 
D) much higher for the number-one-selling brand than it is for the number-two-selling brand.

Question 9

Implicit collusion occurs when oligopolistic firms negotiate a common price.

Accepted Answer

A) True 
 B)False

Question 10

In the ALCOA antitrust case in 1945, the Court ruled that the:

Accepted Answer

A) company had a monopolistic structure and therefore should be broken up. 
B) company was guilty of unfair business practices and therefore should be broken up. 
C) Sherman Antitrust Act did not apply. 
D) two companies had to be disbanded. 
A) company had a monopolistic structure and therefore should be broken up. 
B) company was guilty of unfair business practices and therefore should be broken up. 
C) Sherman Antitrust Act did not apply. 
D) two companies had to be disbanded.

Question 11

The basis of judgment for the Standard Oil case was ________, whereas the basis of judgment for the ALCOA case was ________:

Accepted Answer

A) market structure; market performance. 
B) unfair business practices; price discrimination. 
C) monopolistic abuses; market structure. 
D) market concentration; interlocking directorships. 
A) market structure; market performance. 
B) unfair business practices; price discrimination. 
C) monopolistic abuses; market structure. 
D) market concentration; interlocking directorships.

Question 12

If an industry has a Herfindahl index of 3,000, the contestable market model probably would predict that the industry would be more likely to have a:

Accepted Answer

A) monopolistic price. 
B) competitive price. 
C) monopolistic price if there are no barriers to entry. 
D) competitive price if there are no barriers to entry. 
A) monopolistic price. 
B) competitive price. 
C) monopolistic price if there are no barriers to entry. 
D) competitive price if there are no barriers to entry.

Question 13

Oligopolistic firms:

Accepted Answer

A) may seek to drive competitors out of business for personal reasons, even at great expense. 
B) would not drive competitors out of business to gain control of the market. 
C) know that their competitors pay no attention to their pricing decisions and therefore hope to gain market share by lowering price. 
D) do not pay attention to a competitor's prices because there's nothing they can do about them. 
A) may seek to drive competitors out of business for personal reasons, even at great expense. 
B) would not drive competitors out of business to gain control of the market. 
C) know that their competitors pay no attention to their pricing decisions and therefore hope to gain market share by lowering price. 
D) do not pay attention to a competitor's prices because there's nothing they can do about them.

Question 14

Why was antitrust policy in other countries not as restrictive as in the U.S.and how has increased international competition changed antitrust policy in the United States?

Accepted Answer

The main reasons why antitrust policy in

Question 15

Why have new types of antitrust remedies recently developed?

Accepted Answer

New types of antitrust remedies have rec

Question 16

Refer to the table shown. Using the four-firm concentration ratio, the tire industry is best categorized as: $$\begin{array} { | c | c | c | } 
\hline \text { Industry } & \begin{array} { c } 
\text { Number of } \
\text { sellers }
\end{array} & \begin{array} { c } 
\text { \% of shipments accuunted far by the } 4 \
\text { larget comnanies }
\end{array} \
\hline \text { Tires } & 15 & 95 \
\hline \begin{array} { c } 
\text { Upholstered } \
\text { furniture }
\end{array} & 2,000 & 15 \
\hline
\end{array}$$

Accepted Answer

A) perfectly competitive. 
B) a pure monopoly. 
C) monopolistically competitive. 
D) oligopolistic. 
A) perfectly competitive. 
B) a pure monopoly. 
C) monopolistically competitive. 
D) oligopolistic.

Question 17

When four Infineon Technologies executives participated in an international conspiracy to fix prices for computer memory chips, they were acting with other firms as:

Accepted Answer

A) if they were in a contestable market. 
B) if they faced kinked demand curve. 
C) a cartel. 
D) an industry with monopolistic competition. 
A) if they were in a contestable market. 
B) if they faced kinked demand curve. 
C) a cartel. 
D) an industry with monopolistic competition.

Question 18

Consumers of Google and Facebook services are disadvantaged because:

Accepted Answer

A) consumers do not have accurate information to make decisions. 
B) potential competitors are unable to develop new competing technologies. 
C) consumers are given a service that is now free, but which will cost significant sums later. 
D) the data Google and Facebook collect on users is a barrier to entry to new competition. 
A) consumers do not have accurate information to make decisions. 
B) potential competitors are unable to develop new competing technologies. 
C) consumers are given a service that is now free, but which will cost significant sums later. 
D) the data Google and Facebook collect on users is a barrier to entry to new competition.

Question 19

In a market, there are many firms selling differentiated products. This market is:

Accepted Answer

A) a competitive market. 
B) a monopolistically competitive market. 
C) an oligopolistic market. 
D) a monopoly. 
A) a competitive market. 
B) a monopolistically competitive market. 
C) an oligopolistic market. 
D) a monopoly.

Question 20

The primary criterion governing U.S. antitrust policy until 1945 was:

Accepted Answer

A) laissez-faire. 
B) concentration ratios. 
C) judgment by performance. 
D) judgment by structure. 
A) laissez-faire. 
B) concentration ratios. 
C) judgment by performance. 
D) judgment by structure.

Exam 15: Oligopoly and Antitrust Policy

Over the past two decades anti-trust policy has become:

The Herfindahl index is calculated by adding the squared value of the market shares of all the firms in the industry.

One reason fewer antitrust cases have been brought before the courts is:

Oligopoly is characterized by:

An important way in which globalization changed U.S. antitrust policy is:

When government uses the judgment by performance criterion, a firm is considered a monopoly if it controls a significant segment of the market.

Refer to the graph shown, which shows an oligopolist facing a kinked demand curve. The firm will not increase price when marginal costs fluctuate between which two points?

Suppose there are no barriers to entry in the market for facial tissues, where two brands dominate the industry. According to the theory of contestable markets, the price charged for facial tissues will be:

Implicit collusion occurs when oligopolistic firms negotiate a common price.

In the ALCOA antitrust case in 1945, the Court ruled that the:

The basis of judgment for the Standard Oil case was ________, whereas the basis of judgment for the ALCOA case was ________:

If an industry has a Herfindahl index of 3,000, the contestable market model probably would predict that the industry would be more likely to have a:

Oligopolistic firms:

Why was antitrust policy in other countries not as restrictive as in the U.S.and how has increased international competition changed antitrust policy in the United States?

Why have new types of antitrust remedies recently developed?

Refer to the table shown. Using the four-firm concentration ratio, the tire industry is best categorized as: Industry Number of sellers \% of shipments accuunted far by the 4 larget comnanies Tires 15 95 Upholstered furniture 2,000 15

When four Infineon Technologies executives participated in an international conspiracy to fix prices for computer memory chips, they were acting with other firms as:

Consumers of Google and Facebook services are disadvantaged because:

In a market, there are many firms selling differentiated products. This market is:

The primary criterion governing U.S. antitrust policy until 1945 was:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters

The basis of judgment for the Standard Oil case was , whereas the basis of judgment for the ALCOA case was :