Question 1

In the Brown Shoe Case, the Supreme Court chose to protect competitors and not the consumer.

Accepted Answer

A) True 
 B)False  True

Question 2

Consumer protection laws are based on:

Accepted Answer

A)  the concept that consumers do not always know what is good for them. 
B)  the notion that consumers will benefit from being protected at no cost. 
C)  the belief that consumers have sufficient information to make decisions. 
D)  the idea that competitive markets always provide safe products. 
A)  the concept that consumers do not always know what is good for them. 
B)  the notion that consumers will benefit from being protected at no cost. 
C)  the belief that consumers have sufficient information to make decisions. 
D)  the idea that competitive markets always provide safe products. A

Question 3

The consolidation of firms that participate in the production of a given product line, but at different stages in the production process, is a(n):

Accepted Answer

A)  vertical merger. 
B)  conglomerate merger. 
C)  monopoly merger. 
D)  horizontal merger. 
A)  vertical merger. 
B)  conglomerate merger. 
C)  monopoly merger. 
D)  horizontal merger. A

Question 4

According to the text authors, the more ________ airline industry today is most likely ________ the ________ industry that existed in the 1970s, and it is certainly ________.

Accepted Answer

A)  regulated; less efficient than; less regulated; less safe 
B)  competitive; an improvement over; more regulated; cheaper. 
C)  consolidated; less competitive; regulated; more expensive to fly now. 
D)  efficient; less competitive than; regulated; more expensive 
A)  regulated; less efficient than; less regulated; less safe 
B)  competitive; an improvement over; more regulated; cheaper. 
C)  consolidated; less competitive; regulated; more expensive to fly now. 
D)  efficient; less competitive than; regulated; more expensive

Question 5

The World Trade Organization was created in 1995 to supervise world trade.

Accepted Answer

A) True 
 B)False

Question 6

Antitrust policies are different in different countries.

Accepted Answer

A) True 
 B)False

Question 7

Per se illegality has replaced the rule of reason in analyzing the impact of joint ventures.

Accepted Answer

A) True 
 B)False

Question 8

When the anticompetitive effects of a horizontal merger are considered, the Justice Department is most likely going to consider very closely:

Accepted Answer

A)  the size of and change in the Herfindahl-Hirschman index. 
B)  market share only. 
C)  changes in the Herfindahl-Hirschman index, but not the absolute size of the index. 
D)  only one thing: Is the merger illegal per se? 
A)  the size of and change in the Herfindahl-Hirschman index. 
B)  market share only. 
C)  changes in the Herfindahl-Hirschman index, but not the absolute size of the index. 
D)  only one thing: Is the merger illegal per se?

Question 9

The _______ theory of regulation asserts that firms seek licensing requirements and government action to regulate prices to prevent other firms from entering the market.

Accepted Answer

A)  public interest 
B)  firm take-over 
C)  monopoly 
D)  capture 
A)  public interest 
B)  firm take-over 
C)  monopoly 
D)  capture

Question 10

Although the Justice Department once relied on the Herfindahl-Hirschman Index to evaluate mergers, it no longer does so.

Accepted Answer

A) True 
 B)False

Question 11

The International Monetary Fund was created in 1995 to supervise world trade.

Accepted Answer

A) True 
 B)False

Question 12

One cost of consumer protection laws is a reduction in individual freedom of choice.

Accepted Answer

A) True 
 B)False

Question 13

The marketing of medicines and food is regulated by the:

Accepted Answer

A)  Interstate Commerce Commission. 
B)  Federal Trade Commission. 
C)  Securities and Exchange Commission. 
D)  Food and Drug Administration. 
A)  Interstate Commerce Commission. 
B)  Federal Trade Commission. 
C)  Securities and Exchange Commission. 
D)  Food and Drug Administration.

Question 14

In the Brown Shoe case, which involved a merger, the Supreme Court:

Accepted Answer

A)  allowed the merger, even though it felt the resulting firm would be able to undersell its competitors. 
B)  allowed the merger, because lower shoe prices would have benefited consumers. 
C)  chose to protect competition and blocked the merger. 
D)  refused to hear the case and threw it out without issuing any judgment in the matter. 
A)  allowed the merger, even though it felt the resulting firm would be able to undersell its competitors. 
B)  allowed the merger, because lower shoe prices would have benefited consumers. 
C)  chose to protect competition and blocked the merger. 
D)  refused to hear the case and threw it out without issuing any judgment in the matter.

Question 15

The first law designed to curb monopoly power in the United States was the Sherman Antitrust Act.

Accepted Answer

A) True 
 B)False

Question 16

If a market is open to entry by potential rivals, that market is said to be contestable.

Accepted Answer

A) True 
 B)False

Question 17

In 1978, the government dramatically changed the regulations regarding airlines by:

Accepted Answer

A)  increasing regulations to improve airline safety. 
B)  regulating fare structures to improve pricing and performance. 
C)  removing regulations that had prevented competition in the airline industry. 
D)  outlawing frequent flyer programs. 
A)  increasing regulations to improve airline safety. 
B)  regulating fare structures to improve pricing and performance. 
C)  removing regulations that had prevented competition in the airline industry. 
D)  outlawing frequent flyer programs.

Question 18

Selling below cost by foreign firms is punishable under the _______ Act.

Accepted Answer

A)  Clayton 
B)  Sherman 
C)  Omnibus Trade and Competitiveness 
D)  Global Dependence and International Competitiveness Antidumping 
A)  Clayton 
B)  Sherman 
C)  Omnibus Trade and Competitiveness 
D)  Global Dependence and International Competitiveness Antidumping

Question 19

Regulation by the government to influence the marketing of medicine and food is accomplished by the:

Accepted Answer

A)  Food and Drug Administration. 
B)  Securities and Exchange Commission. 
C)  Federal Trade Commission. 
D)  ICC. 
A)  Food and Drug Administration. 
B)  Securities and Exchange Commission. 
C)  Federal Trade Commission. 
D)  ICC.

Question 20

In the late 1980s, antitrust enforcement was altered so that _______ competitive U.S.firms could cooperate in _______ in research and development.

Accepted Answer

A)  vertically; foreign markets 
B)  horizontally; joint ventures 
C)  vertically; joint ventures 
D)  horizontally; international cartels 
A)  vertically; foreign markets 
B)  horizontally; joint ventures 
C)  vertically; joint ventures 
D)  horizontally; international cartels

In the Brown Shoe Case, the Supreme Court chose to protect competitors and not the consumer.

Consumer protection laws are based on:

The consolidation of firms that participate in the production of a given product line, but at different stages in the production process, is a(n):

According to the text authors, the more airline industry today is most likely the industry that existed in the 1970s, and it is certainly .

The World Trade Organization was created in 1995 to supervise world trade.

Antitrust policies are different in different countries.

Per se illegality has replaced the rule of reason in analyzing the impact of joint ventures.

When the anticompetitive effects of a horizontal merger are considered, the Justice Department is most likely going to consider very closely:

The _______ theory of regulation asserts that firms seek licensing requirements and government action to regulate prices to prevent other firms from entering the market.

Although the Justice Department once relied on the Herfindahl-Hirschman Index to evaluate mergers, it no longer does so.

The International Monetary Fund was created in 1995 to supervise world trade.

One cost of consumer protection laws is a reduction in individual freedom of choice.

The marketing of medicines and food is regulated by the:

In the Brown Shoe case, which involved a merger, the Supreme Court:

The first law designed to curb monopoly power in the United States was the Sherman Antitrust Act.

If a market is open to entry by potential rivals, that market is said to be contestable.

In 1978, the government dramatically changed the regulations regarding airlines by:

Selling below cost by foreign firms is punishable under the _______ Act.

Regulation by the government to influence the marketing of medicine and food is accomplished by the:

In the late 1980s, antitrust enforcement was altered so that _ competitive U.S.firms could cooperate in _ in research and development.

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 16: Antitrust Policy and Business Regulation

In the Brown Shoe Case, the Supreme Court chose to protect competitors and not the consumer.

Consumer protection laws are based on:

The consolidation of firms that participate in the production of a given product line, but at different stages in the production process, is a(n):

According to the text authors, the more ________ airline industry today is most likely ________ the ________ industry that existed in the 1970s, and it is certainly ________.

The World Trade Organization was created in 1995 to supervise world trade.

Antitrust policies are different in different countries.

Per se illegality has replaced the rule of reason in analyzing the impact of joint ventures.

When the anticompetitive effects of a horizontal merger are considered, the Justice Department is most likely going to consider very closely:

The _______ theory of regulation asserts that firms seek licensing requirements and government action to regulate prices to prevent other firms from entering the market.

Although the Justice Department once relied on the Herfindahl-Hirschman Index to evaluate mergers, it no longer does so.

The International Monetary Fund was created in 1995 to supervise world trade.

One cost of consumer protection laws is a reduction in individual freedom of choice.

The marketing of medicines and food is regulated by the:

In the Brown Shoe case, which involved a merger, the Supreme Court:

The first law designed to curb monopoly power in the United States was the Sherman Antitrust Act.

If a market is open to entry by potential rivals, that market is said to be contestable.

In 1978, the government dramatically changed the regulations regarding airlines by:

Selling below cost by foreign firms is punishable under the _______ Act.

Regulation by the government to influence the marketing of medicine and food is accomplished by the:

In the late 1980s, antitrust enforcement was altered so that _______ competitive U.S.firms could cooperate in _______ in research and development.

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

According to the text authors, the more airline industry today is most likely the industry that existed in the 1970s, and it is certainly .

In the late 1980s, antitrust enforcement was altered so that _ competitive U.S.firms could cooperate in _ in research and development.