Question 1

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation) except the:

Accepted Answer

A)   Food and Drug Administration.
B)   Federal Energy Regulatory Commission.
C)   Federal Communications Commission.
D)   50 state public utility commissions.E) A) and D)
F) A) and C)

Question 2

Antitrust authorities are least likely to take action against:

Accepted Answer

A)   conglomerate mergers.
B)   horizontal mergers.
C)   interlocking directorates.
D)   price-fixing.E) B) and C)
F) B) and D)

Question 3

In the U.S.Steel case,the court ruled that:

Accepted Answer

A)   even though a firm's behavior might be legal,the mere possession of monopoly power was in violation of the Sherman Act.
B)   only monopolies that unreasonably restrain trade are subject to antitrust action under the Sherman Act.
C)   when made by dominant firms,tying contracts are illegal,per se.
D)   the company violated the Clayton Act and therefore should be dissolved into several competing firms.E) A) and B)
F) All of the above

Question 4

In the Microsoft antitrust case,the federal government said in essence that:

Accepted Answer

A)   the mere presence of monopoly violated the Sherman Act,irrespective of Microsoft's behavior.
B)   Microsoft was a "bad monopoly."
C)   Microsoft was generally a "good monopoly" but that its tying contracts involving Internet Explorer violated the Clayton Act.
D)   the case was similar to the U.S.Steel case of 1920.E) None of the above
F) A) and B)

Question 5

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Accepted Answer

A)   The Alcoa case and the Microsoft case.
B)   The U.S.Steel case and the Alcoa case.
C)   The DuPont cellophane case and the U.S.Steel case.
D)   The U.S.Steel case and the Microsoft case.E) A) and B)
F) All of the above

Question 6

Answer the question on the basis of the following table showing market shares of firms in hypothetical industries.Assume these are distinct industries with no buyer-seller relationships or competition among them.   Market Share of Firms in Industry \begin{array}{c}&&	ext { Market Share of Firms in Industry }\end{array}​​ Market Share of Firms in Industry ​ 
 IndustryAlphaBetaCappaDelta12345630302020−−−−8010531125252525−−−−202020201010\begin{array}{c}\begin{array}{lll}\Industry\Alpha\Beta\Cappa\Delta\\end{array}\begin{array}{lll}\1&2&3&4&5&6\30&30&20&20&--&--\80&10&5&3&1&1\25&25&25&25&--&--\20&20&20&20&10&10\end{array}\end{array}IndustryAlphaBetaCappaDelta​130802520​230102520​32052520​42032520​5−−1−−10​6−−1−−10​​  Refer to the table.The government would likely challenge a merger between:

Accepted Answer

A)   Firm 1 in Alpha and Firm 6 in Delta.
B)   Firms 3 and 4 in Beta.
C)   Firms 1 and 2 in Cappa.
D)   Firm 4 in Alpha and Firm 3 in Cappa. E) All of the above
F) B) and C)

Question 7

The "rule of reason" indicated that:

Accepted Answer

A)   if less than four firms account for three-fourths of an industry's sales,the industry is in violation of the Sherman Act.
B)   social regulation should not be enforced unreasonably so that costs exceed benefits.
C)   the mere possession of monopoly power is a violation of the antitrust laws.
D)   only contracts and combinations that unreasonably restrain trade violate the antitrust laws.E) A) and B)
F) A) and C)

Question 8

The Celler-Kefauver Act of 1950:

Accepted Answer

A)   modified patent legislation by reducing the number of years over which a patent is applicable.
B)   prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition.
C)   declared all conglomerate mergers to be illegal.
D)   prohibited any firm from buying the stock of another firm where the effect was to lessen competition.E) None of the above
F) A) and B)

Question 9

Interlocking directorates are:

Accepted Answer

A)   legal if the two firms have small market shares.
B)   illegal under provisions of the Federal Trade Commission Act of 1914.
C)   illegal under provisions of the Celler-Kefauver Act of 1950.
D)   illegal under provisions of the Clayton Act of 1914.E) A) and B)
F) A) and C)

Question 10

Which one of the following is not prohibited by the original Clayton Act?

Accepted Answer

A)   The purchase of the stocks of rival firms that lessens competition.
B)   The purchase of the assets of rival firms that lessens competition.
C)   An exclusive dealer or tying agreements that lessen competition.
D)   Price discrimination that lessens competition.E) A) and C)
F) B) and C)

Question 11

The main purpose of the antitrust laws is:

Accepted Answer

A)   to encourage firms to produce where P > MC.
B)   the elimination of both negative and positive externalities.
C)   to prevent the monopolization of industries.
D)   to regulate natural monopolies.E) B) and C)
F) C) and D)

Question 12

(Consider This) According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

Accepted Answer

A)   Dell and Gateway (personal computer makers) .
B)   Boeing and Airbus (aircraft manufacturers) .
C)   Heinz and Del Monte (food product firms) .
D)   Sotheby's and Christie's (art auction houses) .E) B) and C)
F) All of the above

Question 13

The antitrust laws are enforced by the:

Accepted Answer

A)   Federal Bureau of Investigation.
B)   Antimonopoly Court of Appeals.
C)   Federal Justice Department and the Federal Trade Commission.
D)   Department of Commerce.E) B) and C)
F) None of the above

Question 14

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

Accepted Answer

A)   public interest theory of regulation.
B)   theory of natural monopolies.
C)   legal cartel theory of regulation.
D)   Alcoa and U.S.Steel court decisions.E) A) and D)
F) A) and B)

Question 15

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

Accepted Answer

A) True 
 B)False

Question 16

Structuralists take the position that:

Accepted Answer

A)   the rule of reason is appropriate and desirable in interpreting the Sherman Act.
B)   only unreasonable anticompetitive acts should be regarded as violations of the antitrust laws.
C)   industries should be judged on the basis of their technological progress and their price-output behavior.
D)   an industry that is highly concentrated will behave monopolistically.E) A) and B)
F) A) and C)

Question 17

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

Accepted Answer

A) True 
 B)False

Question 18

The antitrust laws are based on the:

Accepted Answer

A)   creative destruction view of competition.
B)   idea that competition leads to greater economic efficiency than does a monopoly.
C)   view that nonprice competition should be strictly regulated by government.
D)   view that all negative externalities should be eliminated by government action.E) None of the above
F) A) and B)

Question 19

The Celler-Kefauver Act of 1950:

Accepted Answer

A)   outlawed price-fixing.
B)   amended the Sherman Act.
C)   amended the Clayton Act.
D)   created the Civil Aeronautics Board (CA
B)  .E) B) and D)
F) C) and D)

Question 20

Behavioralists believe that:

Accepted Answer

A)   if four or fewer firms control more than half of the market for a product,then the Sherman Act is being violated.
B)   industries should be judged on the basis of their price-output behavior and their technological progressiveness.
C)   there is no evidence that any monopolistic industry has abused its market power.
D)   all concentrations of economic power are socially undesirable.E) A) and C)
F) A) and D)

Exam 20: Antitrust Policy and Regulation

The main purpose of the antitrust laws is:

Correct Answer
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(Consider This) According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

Correct Answer
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The Celler-Kefauver Act of 1950:

Correct Answer
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The Celler-Kefauver Act of 1950:

Correct Answer
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Which one of the following is not prohibited by the original Clayton Act?

Correct Answer
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Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

Correct Answer
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Interlocking directorates are:

Correct Answer
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Structuralists take the position that:

Correct Answer
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Behavioralists believe that:

Correct Answer
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In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Correct Answer
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All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation) except the:

Correct Answer
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The antitrust laws are enforced by the:

Correct Answer
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In the U.S.Steel case,the court ruled that:

Correct Answer
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In the Microsoft antitrust case,the federal government said in essence that:

Correct Answer
verified

The antitrust laws are based on the:

Correct Answer
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Correct Answer
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Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

Correct Answer
verified

The "rule of reason" indicated that:

Correct Answer
verified

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

Correct Answer
verified

Antitrust authorities are least likely to take action against:

Correct Answer
verified

Exam 20: Antitrust Policy and Regulation

The main purpose of the antitrust laws is:

Correct AnswerverifiedShow Answer

(Consider This) According to the Consider This box on catfish and art,which of the following firms were convicted of price-fixing?

Correct AnswerverifiedShow Answer

The Celler-Kefauver Act of 1950:

Correct AnswerverifiedShow Answer

The Celler-Kefauver Act of 1950:

Correct AnswerverifiedShow Answer

Which one of the following is not prohibited by the original Clayton Act?

Correct AnswerverifiedShow Answer

Suppose the transportation industry has been regulated for many years.Government now proposes to deregulate the industry,only to find that firms in the industry oppose this action.This is consistent with the:

Correct AnswerverifiedShow Answer

Interlocking directorates are:

Correct AnswerverifiedShow Answer

Structuralists take the position that:

Correct AnswerverifiedShow Answer

Behavioralists believe that:

Correct AnswerverifiedShow Answer

In which of the following pairs of antitrust cases did the firms prevail against the antitrust charges leveled against them?

Correct AnswerverifiedShow Answer

All of the following are regulatory commissions dealing with industrial regulation (as distinct from social regulation) except the:

Correct AnswerverifiedShow Answer

The antitrust laws are enforced by the:

Correct AnswerverifiedShow Answer

In the U.S.Steel case,the court ruled that:

Correct AnswerverifiedShow Answer

In the Microsoft antitrust case,the federal government said in essence that:

Correct AnswerverifiedShow Answer

The antitrust laws are based on the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Anticompetitive mergers are illegal under provisions of the Clayton Act (as amended).

Correct AnswerverifiedShow Answer

The "rule of reason" indicated that:

Correct AnswerverifiedShow Answer

The legal cartel theory indicates that,in any industry where market demand and the long-run average total cost curve intersect close to the latter's minimum,government regulation is mandatory and desirable.

Correct AnswerverifiedShow Answer

Antitrust authorities are least likely to take action against:

Correct AnswerverifiedShow Answer

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