Question 1

Prior to the onset of deregulation in the US during the 1970s, it was common for measurements of concentration ratios and HHIs

Accepted Answer

A)  to exceed 1,000 
B)  to exceed 10,000 
C)  to stop at national borders. 
D)  to extend past national borders. 
A)  to exceed 1,000 
B)  to exceed 10,000 
C)  to stop at national borders. 
D)  to extend past national borders.

Question 2

Which of the following may be legal and even common practice in a market economy?

Accepted Answer

A)  making the ability to buy one product conditional on also buying another 
B)  bundling several products together and selling them as a package 
C)  deterring new market entrants with short term predatory pricing 
D)  selling product for less than the average variable cost of producing same. 
A)  making the ability to buy one product conditional on also buying another 
B)  bundling several products together and selling them as a package 
C)  deterring new market entrants with short term predatory pricing 
D)  selling product for less than the average variable cost of producing same.

Question 3

For the past two years, a cellphone manufacturer has been selling to a group of distributors, who then sell the products to retailers to sell to the general public. The firm has now informed its distributors that each of them must sell the cellphones for a minimum price the manufacturer has set. In these circumstances,

Accepted Answer

A)  any resulting minimum resale price maintenance agreements will be illegal. 
B)  the purpose of this contract is to encourage competition between the distributors. 
C)  any resulting agreement to give dealers exclusive distribution rights is illegal. 
D)  these tie-in sales encourage competition between the manufacturer's distributors. 
A)  any resulting minimum resale price maintenance agreements will be illegal. 
B)  the purpose of this contract is to encourage competition between the distributors. 
C)  any resulting agreement to give dealers exclusive distribution rights is illegal. 
D)  these tie-in sales encourage competition between the manufacturer's distributors.

Question 4

The Herfindahl-hirschman index is calculated by taking _______, squaring it, and adding them up to get a total.

Accepted Answer

A)  concentration ratio of each firm in the industry 
B)  total revenues of each firm in the industry 
C)  market share of each firm in the industry 
D)  market capitalization of each firm in the industry 
A)  concentration ratio of each firm in the industry 
B)  total revenues of each firm in the industry 
C)  market share of each firm in the industry 
D)  market capitalization of each firm in the industry

Question 5

Which of the following has the power to allow a merger, prohibit it, or allow it if certain conditions are met?

Accepted Answer

A)  antitrust regulators at the FTC 
B)  Department of Justice 
C)  Congress and/or Senate 
D)  Supreme Court 
A)  antitrust regulators at the FTC 
B)  Department of Justice 
C)  Congress and/or Senate 
D)  Supreme Court

Question 6

The information below sets out the estimated market revenue for the television manufacturing market is given in the table below.
 
Based on this information, the four-firm concentration ratio is

Accepted Answer

A)  45.3 
B)  50 
C)  55.1 
D)  62.5 
A)  45.3 
B)  50 
C)  55.1 
D)  62.5

Question 7

The information below sets out the estimated market revenue for the television manufacturing market.
 
Based on this information, the Herfindahl-Hirschman Index is

Accepted Answer

A)  896.73 
B)  1,074.04 
C)  1,505.13 
D)  1,742.10 
A)  896.73 
B)  1,074.04 
C)  1,505.13 
D)  1,742.10

Question 8

An agreement between a manufacturer and a distributor stipulating that a dealer will only distribute that manufacturer's products would be classified as a form of

Accepted Answer

A)  predatory pricing. 
B)  tie-in-sales arrangement. 
C)  exclusive dealing. 
D)  price maintenance. 
A)  predatory pricing. 
B)  tie-in-sales arrangement. 
C)  exclusive dealing. 
D)  price maintenance.

Question 9

A government sanctioned merger between two companies can sometimes lead to a clash _______
That makes both firms worse off.

Accepted Answer

A)  with government regulators 
B)  other market participants 
C)  of corporate personalities 
D)  with market-oriented economy fundamentals 
A)  with government regulators 
B)  other market participants 
C)  of corporate personalities 
D)  with market-oriented economy fundamentals

Question 10

Which of the following poses a difficult challenge for U.S. competition policy?

Accepted Answer

A)  monopoly 
B)  monopolistic competition 
C)  perfect competition 
D)  natural monopoly 
A)  monopoly 
B)  monopolistic competition 
C)  perfect competition 
D)  natural monopoly

Question 11

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below.
 
The marginal cost of going from a production of 4 million therms to a production of 5 million therms is

Accepted Answer

A)  $133 million 
B)  $113 million 
C)  $23 million 
D)  $20 million 
A)  $133 million 
B)  $113 million 
C)  $23 million 
D)  $20 million

Question 12

The term "tie-in sales" is synonymous with

Accepted Answer

A)  price maintenance 
B)  exclusive dealing 
C)  bundling 
D)  predatory pricing 
A)  price maintenance 
B)  exclusive dealing 
C)  bundling 
D)  predatory pricing

Question 13

Practices that reduce competition without actual documented agreements between firms to raise price are commonly referred to as _______.

Accepted Answer

A)  legal practices 
B)  competitive practices 
C)  regulated practices 
D)  restrictive practices 
A)  legal practices 
B)  competitive practices 
C)  regulated practices 
D)  restrictive practices

Question 14

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below.
 
An unregulated monopoly will have a _______ of _______.

Accepted Answer

A)  loss, $24 million 
B)  loss, $7 million 
C)  profit, $24 million 
D)  profit, $7 million 
A)  loss, $24 million 
B)  loss, $7 million 
C)  profit, $24 million 
D)  profit, $7 million

Question 15

Which of the following concerns would groups like the Consumer Federation of America and Public Knowledge most likely raise with regulators considering a merger application?

Accepted Answer

A)  the merger would reduce competition 
B)  the merger would create regulatory capture 
C)  the merger would lead to future decades of lower prices 
D)  the merger would increase output and all of the above 
A)  the merger would reduce competition 
B)  the merger would create regulatory capture 
C)  the merger would lead to future decades of lower prices 
D)  the merger would increase output and all of the above

Question 16

In the closing decades of the nineteenth century, many industries in the U.S. economy were dominated by a single firm that had most of the sales for the entire country. In many cases these large firms were _______.

Accepted Answer

A)  as efficient and innovative as they could be 
B)  organized in the legal form of a trust 
C)  able to provide consumers with the lowest price products 
D)  using illegal practices to dominate the US economy 
A)  as efficient and innovative as they could be 
B)  organized in the legal form of a trust 
C)  able to provide consumers with the lowest price products 
D)  using illegal practices to dominate the US economy

Question 17

The FTC and the Department of Justice guidelines state that, in the US market-driven economy, firms will be forbidden to

Accepted Answer

A)  agree to rig bids or allocate lines of commerce. 
B)  agree to let the market set prevailing prices or output. 
C)  refuse to share customers, suppliers or territories. 
D)  refuse to share or divide markets. 
A)  agree to rig bids or allocate lines of commerce. 
B)  agree to let the market set prevailing prices or output. 
C)  refuse to share customers, suppliers or territories. 
D)  refuse to share or divide markets.

Question 18

Briefly discuss the forces that have increased the level of competition faced by firms in the modern day U.S. economy and elsewhere.

Accepted Answer

The forces of globalization and new comm

Question 19

JustMeInc. is the only provider of high speed internet in Tinytown. The firm charges their customers on an annual basis. Its cost and demand information are given below.
 
An unregulated monopoly will have profits of

Accepted Answer

A)  $120 million 
B)  $140 million 
C)  $160 million 
D)  $180 million 
A)  $120 million 
B)  $140 million 
C)  $160 million 
D)  $180 million

Question 20

The information below sets out the estimated market shares for the cellular phone manufacturing market are given in the table below.
 
Plus 8 more firms with 1% each
If Samsung were to acquire Sanyo, the Herfindahl-Hirschman Index would be

Accepted Answer

A)  1,272 
B)  1,884 
C)  1,836 
D)  2,216 
A)  1,272 
B)  1,884 
C)  1,836 
D)  2,216

Prior to the onset of deregulation in the US during the 1970s, it was common for measurements of concentration ratios and HHIs

Which of the following may be legal and even common practice in a market economy?

The Herfindahl-hirschman index is calculated by taking _______, squaring it, and adding them up to get a total.

Which of the following has the power to allow a merger, prohibit it, or allow it if certain conditions are met?

The information below sets out the estimated market revenue for the television manufacturing market is given in the table below. Based on this information, the four-firm concentration ratio is

The information below sets out the estimated market revenue for the television manufacturing market. Based on this information, the Herfindahl-Hirschman Index is

An agreement between a manufacturer and a distributor stipulating that a dealer will only distribute that manufacturer's products would be classified as a form of

A government sanctioned merger between two companies can sometimes lead to a clash _______ That makes both firms worse off.

Which of the following poses a difficult challenge for U.S. competition policy?

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. The marginal cost of going from a production of 4 million therms to a production of 5 million therms is

The term "tie-in sales" is synonymous with

Practices that reduce competition without actual documented agreements between firms to raise price are commonly referred to as _______.

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. An unregulated monopoly will have a _ of _.

Which of the following concerns would groups like the Consumer Federation of America and Public Knowledge most likely raise with regulators considering a merger application?

In the closing decades of the nineteenth century, many industries in the U.S. economy were dominated by a single firm that had most of the sales for the entire country. In many cases these large firms were _______.

The FTC and the Department of Justice guidelines state that, in the US market-driven economy, firms will be forbidden to

Briefly discuss the forces that have increased the level of competition faced by firms in the modern day U.S. economy and elsewhere.

JustMeInc. is the only provider of high speed internet in Tinytown. The firm charges their customers on an annual basis. Its cost and demand information are given below. An unregulated monopoly will have profits of

The information below sets out the estimated market shares for the cellular phone manufacturing market are given in the table below. Plus 8 more firms with 1% each If Samsung were to acquire Sanyo, the Herfindahl-Hirschman Index would be

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Exam 11: Monopoly and Antitrust Policy

Prior to the onset of deregulation in the US during the 1970s, it was common for measurements of concentration ratios and HHIs

Which of the following may be legal and even common practice in a market economy?

The Herfindahl-hirschman index is calculated by taking _______, squaring it, and adding them up to get a total.

Which of the following has the power to allow a merger, prohibit it, or allow it if certain conditions are met?

The information below sets out the estimated market revenue for the television manufacturing market is given in the table below. Based on this information, the four-firm concentration ratio is

The information below sets out the estimated market revenue for the television manufacturing market. Based on this information, the Herfindahl-Hirschman Index is

An agreement between a manufacturer and a distributor stipulating that a dealer will only distribute that manufacturer's products would be classified as a form of

A government sanctioned merger between two companies can sometimes lead to a clash _______ That makes both firms worse off.

Which of the following poses a difficult challenge for U.S. competition policy?

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. The marginal cost of going from a production of 4 million therms to a production of 5 million therms is

The term "tie-in sales" is synonymous with

Practices that reduce competition without actual documented agreements between firms to raise price are commonly referred to as _______.

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. An unregulated monopoly will have a _______ of _______.

Which of the following concerns would groups like the Consumer Federation of America and Public Knowledge most likely raise with regulators considering a merger application?

In the closing decades of the nineteenth century, many industries in the U.S. economy were dominated by a single firm that had most of the sales for the entire country. In many cases these large firms were _______.

The FTC and the Department of Justice guidelines state that, in the US market-driven economy, firms will be forbidden to

Briefly discuss the forces that have increased the level of competition faced by firms in the modern day U.S. economy and elsewhere.

JustMeInc. is the only provider of high speed internet in Tinytown. The firm charges their customers on an annual basis. Its cost and demand information are given below. An unregulated monopoly will have profits of

The information below sets out the estimated market shares for the cellular phone manufacturing market are given in the table below. Plus 8 more firms with 1% each If Samsung were to acquire Sanyo, the Herfindahl-Hirschman Index would be

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below. An unregulated monopoly will have a _ of _.