Question 1

Government policy-makers often must decide how to balance the potential benefits of _______
Against the potential benefits of _______.

Accepted Answer

A)  competition; nationalization 
B)  corporate size; competition 
C)  corporate size; predatory pricing 
D)  nationalization; privatization 
A)  competition; nationalization 
B)  corporate size; competition 
C)  corporate size; predatory pricing 
D)  nationalization; privatization

Question 2

In the U.S., about _______ of all reported merger and acquisition transactions in 2008 exceeded $500 million, while about _______ exceeded $1 billion.

Accepted Answer

A)  80%; 20% 
B)  99%; 1% 
C)  60%; 40% 
D)  25%; 10% 
A)  80%; 20% 
B)  99%; 1% 
C)  60%; 40% 
D)  25%; 10%

Question 3

If the two smallest firms in a competitive market merged, the four-firm concentration ratio _______
Because _______.

Accepted Answer

A)  would change; the degree of competition is notably diminished 
B)  would not change; especially high concentration ratios can benefit consumers 
C)  would change; the largest firms high concentration ratio is diminished 
D)  would not change; the degree of competition isn't notably diminished 
A)  would change; the degree of competition is notably diminished 
B)  would not change; especially high concentration ratios can benefit consumers 
C)  would change; the largest firms high concentration ratio is diminished 
D)  would not change; the degree of competition isn't notably diminished

Question 4

The information below sets out the estimated market shares for the cellular phone manufacturing market.
 
Plus 8 more firms with 1% each
If Samsung were to acquire Sanyo, the four-firm concentration ratio would be

Accepted Answer

A)  70 
B)  68 
C)  65 
D)  73 
A)  70 
B)  68 
C)  65 
D)  73

Question 5

A merger will likely lessen competition if

Accepted Answer

A)  they are very beneficial to consumers. 
B)  less concentration in the market results. 
C)  it enables the new single firm to raise price. 
D)  both b and c above are correct answers. 
A)  they are very beneficial to consumers. 
B)  less concentration in the market results. 
C)  it enables the new single firm to raise price. 
D)  both b and c above are correct answers.

Question 6

If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely be the focus of the arguments that they will present in favor of the merger?

Accepted Answer

A)  consumers can purchase better quality goods or services at a lower price 
B)  the newly created firm is able to take advantage of economies of scale 
C)  the newly created firm could eliminate duplicative investments 
D)  the new firm will produce more efficiently and all of the above 
A)  consumers can purchase better quality goods or services at a lower price 
B)  the newly created firm is able to take advantage of economies of scale 
C)  the newly created firm could eliminate duplicative investments 
D)  the new firm will produce more efficiently and all of the above

Question 7

Norway's government nationalized the country's oil resources, and it has been accumulating a massive sovereign wealth fund worth billions of dollars ever since. This sovereign fund is used as a monetary source for government funded national education and healthcare. This is because the wealth generated by nationalized industries

Accepted Answer

A)  is used to serve the citizens of the country. 
B)  is used to serve the interests of oil industry. 
C)  always charge high prices and reduce output. 
D)  never return value to citizens of the country. 
A)  is used to serve the citizens of the country. 
B)  is used to serve the interests of oil industry. 
C)  always charge high prices and reduce output. 
D)  never return value to citizens of the country.

Question 8

Briefly discuss the Herfindahl-Hirschman Index HHI ), including an explanation of what it is used for and how it is calculated.

Accepted Answer

A is a way of measuring the ex

Question 9

If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about

Accepted Answer

A)  regulatory recapture. 
B)  taking advantage of economies of scale. 
C)  new ways of pleasing customers. 
D)  the extent of competition. 
A)  regulatory recapture. 
B)  taking advantage of economies of scale. 
C)  new ways of pleasing customers. 
D)  the extent of competition.

Question 10

JustMeInc., is the only provider of high speed internet in Tinytown. The firm charges its customers on an annual basis. The firm's cost and demand information are given below.

An unregulated monopoly will have _______ million subscribers and charge each of them _______.

Accepted Answer

A)  3; $233.33 
B)  4; $210 
C)  5; $180 
D)  6; $150 
A)  3; $233.33 
B)  4; $210 
C)  5; $180 
D)  6; $150

Question 11

Antitrust law includes specific rules against restrictive practices in particular because

Accepted Answer

A)  they're effective in creating natural monopolies. 
B)  they're very disruptive and controversial practices. 
C)  their effects can reduce competition. 
D)  their specific contracts are complicated. 
A)  they're effective in creating natural monopolies. 
B)  they're very disruptive and controversial practices. 
C)  their effects can reduce competition. 
D)  their specific contracts are complicated.

Question 12

Antitrust regulations would most likely require one of the following in order to determine whether or not a merger may enhance competition. Which one is it?

Accepted Answer

A)  analysis using numerical tools. 
B)  obvious objective judgments. 
C)  readily qualified judgments. 
D)  highly complex analytical tools. 
A)  analysis using numerical tools. 
B)  obvious objective judgments. 
C)  readily qualified judgments. 
D)  highly complex analytical tools.

Question 13

In order to analyze the effects of a particular business merger, economists typically measure whether the competitive change has

Accepted Answer

A)  helped consumers. 
B)  hurt consumers. 
C)  made much difference. 
D)  all of the above. 
A)  helped consumers. 
B)  hurt consumers. 
C)  made much difference. 
D)  all of the above.

Question 14

A narrowly defined market will tend to make concentration appear _______, while a broadly defined market will tend to make it appear _______.

Accepted Answer

A)  concerning; less concerning 
B)  higher; smaller 
C)  less concerning; concerning 
D)  smaller; higher 
A)  concerning; less concerning 
B)  higher; smaller 
C)  less concerning; concerning 
D)  smaller; higher

Question 15

Which of the following completes the argument against deregulation of U.S. banks that began with the phrase: "if banks competed to pay higher rates of interest",

Accepted Answer

A)  they might also compete to make riskier loans, potentially imperiling the safety of the banking system. 
B)  they might also compete to make less riskier loans, potentially imperiling the U.S. consumers' reliance on credit. 
C)  they will end up playing a large role in setting the regulations that they will follow. 
D)  they will send lobbyists to offer well-paid jobs to some of the retiring members of the regulatory board 
A)  they might also compete to make riskier loans, potentially imperiling the safety of the banking system. 
B)  they might also compete to make less riskier loans, potentially imperiling the U.S. consumers' reliance on credit. 
C)  they will end up playing a large role in setting the regulations that they will follow. 
D)  they will send lobbyists to offer well-paid jobs to some of the retiring members of the regulatory board

Question 16

For the restaurant industry in Seattle, with dozens or hundreds of extremely small competitors, the value of the HHI

Accepted Answer

A)  might drop as low as 100, but not less. 
B)  might reach as low as 1,000, but not less. 
C)  might reach as high as 1,000, but not more. 
D)  might drop as low as 100 or even less. 
A)  might drop as low as 100, but not less. 
B)  might reach as low as 1,000, but not less. 
C)  might reach as high as 1,000, but not more. 
D)  might drop as low as 100 or even less.

Question 17

The information below sets out the estimated market shares for the cellular phone manufacturing market.
 
Plus 8 more firms with 1% each
Based on this information, the Herfindahl-Hirschman Index is

Accepted Answer

A)  1,272 
B)  2,216 
C)  1,836 
D)  1,800 
A)  1,272 
B)  2,216 
C)  1,836 
D)  1,800

Question 18

Which of the following denotes a weakness that is common to both the four firm concentration ratio and the HHI?

Accepted Answer

A)  assuming the subject market is poorly defined relative to measuring its concentration of competition 
B)  case-by-case analysis of the extent of competition is highly subjective. 
C)  assuming the subject market is well-defined relative to measuring how sales are divided within it. 
D)  case-by-case analysis of the extent of competition is highly objective. 
A)  assuming the subject market is poorly defined relative to measuring its concentration of competition 
B)  case-by-case analysis of the extent of competition is highly subjective. 
C)  assuming the subject market is well-defined relative to measuring how sales are divided within it. 
D)  case-by-case analysis of the extent of competition is highly objective.

Question 19

Which of the following government institutions bears the responsibility of enforcing US antitrust laws?

Accepted Answer

A)  Federal Trade Commission 
B)  Department of Justice 
C)  Supreme Court 
D)  Congress and Senate 
A)  Federal Trade Commission 
B)  Department of Justice 
C)  Supreme Court 
D)  Congress and Senate

Question 20

The implicit assumption that competitive conditions across industries are similar enough to make a decision about the effects of a merger is

Accepted Answer

A)  fundamental to case-by-case analysis of how sales are divided in a particular market. 
B)  fundamental to antitrust regulators for conducting case-by-case competitive analysis. 
C)  a fundamentally sound principle found in all antitrust law. 
D)  a weakness of the concentration ratio analysis method. 
A)  fundamental to case-by-case analysis of how sales are divided in a particular market. 
B)  fundamental to antitrust regulators for conducting case-by-case competitive analysis. 
C)  a fundamentally sound principle found in all antitrust law. 
D)  a weakness of the concentration ratio analysis method.

Government policy-makers often must decide how to balance the potential benefits of _ Against the potential benefits of _.

In the U.S., about _ of all reported merger and acquisition transactions in 2008 exceeded $500 million, while about _ exceeded $1 billion.

If the two smallest firms in a competitive market merged, the four-firm concentration ratio _ Because _.

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each If Samsung were to acquire Sanyo, the four-firm concentration ratio would be

A merger will likely lessen competition if

If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely be the focus of the arguments that they will present in favor of the merger?

Briefly discuss the Herfindahl-Hirschman Index HHI ), including an explanation of what it is used for and how it is calculated.

If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about

JustMeInc., is the only provider of high speed internet in Tinytown. The firm charges its customers on an annual basis. The firm's cost and demand information are given below. An unregulated monopoly will have _ million subscribers and charge each of them _.

Antitrust law includes specific rules against restrictive practices in particular because

Antitrust regulations would most likely require one of the following in order to determine whether or not a merger may enhance competition. Which one is it?

In order to analyze the effects of a particular business merger, economists typically measure whether the competitive change has

A narrowly defined market will tend to make concentration appear _, while a broadly defined market will tend to make it appear _.

Which of the following completes the argument against deregulation of U.S. banks that began with the phrase: "if banks competed to pay higher rates of interest",

For the restaurant industry in Seattle, with dozens or hundreds of extremely small competitors, the value of the HHI

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each Based on this information, the Herfindahl-Hirschman Index is

Which of the following denotes a weakness that is common to both the four firm concentration ratio and the HHI?

Which of the following government institutions bears the responsibility of enforcing US antitrust laws?

The implicit assumption that competitive conditions across industries are similar enough to make a decision about the effects of a merger is

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

Government policy-makers often must decide how to balance the potential benefits of _______ Against the potential benefits of _______.

In the U.S., about _______ of all reported merger and acquisition transactions in 2008 exceeded $500 million, while about _______ exceeded $1 billion.

If the two smallest firms in a competitive market merged, the four-firm concentration ratio _______ Because _______.

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each If Samsung were to acquire Sanyo, the four-firm concentration ratio would be

A merger will likely lessen competition if

If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely be the focus of the arguments that they will present in favor of the merger?

Briefly discuss the Herfindahl-Hirschman Index HHI ), including an explanation of what it is used for and how it is calculated.

If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about

JustMeInc., is the only provider of high speed internet in Tinytown. The firm charges its customers on an annual basis. The firm's cost and demand information are given below. An unregulated monopoly will have _______ million subscribers and charge each of them _______.

Antitrust law includes specific rules against restrictive practices in particular because

Antitrust regulations would most likely require one of the following in order to determine whether or not a merger may enhance competition. Which one is it?

In order to analyze the effects of a particular business merger, economists typically measure whether the competitive change has

A narrowly defined market will tend to make concentration appear _______, while a broadly defined market will tend to make it appear _______.

Which of the following completes the argument against deregulation of U.S. banks that began with the phrase: "if banks competed to pay higher rates of interest",

For the restaurant industry in Seattle, with dozens or hundreds of extremely small competitors, the value of the HHI

The information below sets out the estimated market shares for the cellular phone manufacturing market. Plus 8 more firms with 1% each Based on this information, the Herfindahl-Hirschman Index is

Which of the following denotes a weakness that is common to both the four firm concentration ratio and the HHI?

Which of the following government institutions bears the responsibility of enforcing US antitrust laws?

The implicit assumption that competitive conditions across industries are similar enough to make a decision about the effects of a merger is

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

Government policy-makers often must decide how to balance the potential benefits of _ Against the potential benefits of _.

In the U.S., about _ of all reported merger and acquisition transactions in 2008 exceeded $500 million, while about _ exceeded $1 billion.

If the two smallest firms in a competitive market merged, the four-firm concentration ratio _ Because _.

JustMeInc., is the only provider of high speed internet in Tinytown. The firm charges its customers on an annual basis. The firm's cost and demand information are given below. An unregulated monopoly will have _ million subscribers and charge each of them _.

A narrowly defined market will tend to make concentration appear _, while a broadly defined market will tend to make it appear _.