Question 1

Actions by a seller that prevent its suppliers or buyers from dealing with a competitor are:

Accepted Answer

A)   territorial divisions.
B)   price discrimination.
C)   exclusionary practices.
D)   interlocking directorates.

Question 2

Federal regulatory agencies and state regulatory agencies have jurisdiction over:

Accepted Answer

A)   activities in interstate commerce and intrastate commerce, respectively.
B)   exactly the same activities, which creates double regulatory control for all business activities.
C)   completely separate industries; the federal government regulates 50% of all industries and state governments regulate the other 50%.
D)   none of the above.

Question 3

Firms A and B are competitors and agree to charge $100.00 for their products. Firms C and D are also competitors in a different market and agree that neither will charge less than $80.00 for its product. The pricing decisions of Firms A and B:

Accepted Answer

A)   and C and D are perfectly legal.
B)   and C and D are per se violations of the antitrust laws.
C)   and C and D are subject to a Rule of Reason interpretation when determining if they are anticompetitive.
D)   are per se violations of the antitrust laws, but the pricing decisions of Firms C and D are subject to the Rule of Reason.

Question 4

An antitrust suit can be brought against a firm by:

Accepted Answer

A)   another firm.
B)   a state government.
C)   the U.S. government.
D)   all of the above.

Question 5

What are cost-plus pricing and incentive pricing, and how does each affect economic efficiency?

Accepted Answer

Cost-plus pricing allows a firm to earn ...

Question 6

With triple damages a firm:

Accepted Answer

A)   injured by an antitrust violation can sue the offending firm for three times its losses.
B)   found guilty of violating the antitrust laws can be split into three unrelated companies.
C)   found guilty of violating the antitrust laws can be sued three times for the same offense.
D)   none of the above.

Question 7

The primary purpose of the U.S. antitrust laws is to:

Accepted Answer

A)   regulate natural monopolies.
B)   ensure that businesses earn only reasonable rates of profit.
C)   promote the operation of market forces and limit practices that injure competition.
D)   protect consumers from false and misleading advertising and product claims by businesses.

Question 8

The justification for regulation of businesses that provide goods and services that are important to the public well-being is based on:

Accepted Answer

A)   efficiency.
B)   the public interest.
C)   the need for lower prices.
D)   the theory of social regulation.

Question 9

Give examples of the formation of joint ventures that could strengthen competition, and that could weaken competition.

Accepted Answer

A joint venture of two firms that result...

Question 10

The antitrust act directed primarily at price discrimination is the:

Accepted Answer

A)   Sherman Act.
B)   Celler-Kefauver Act.
C)   Robinson-Patman Act.
D)   Federal Trade Commission Act.

Question 11

Regulation is designed to:

Accepted Answer

A)   promote competition by prohibiting certain practices.
B)   address certain problems through government involvement in business decisions.
C)   increase government participation in market transactions through public provision of goods and services.
D)   all of the above.

Question 12

Government regulation is typically divided into industry regulation and social regulation.

Accepted Answer

A) True 
 B)False

Question 13

Each of the following is an argument offered in "Up for Debate: Has Our Enthusiasm for Regulation Gone Too Far?" except:

Accepted Answer

A)   new standards set by the Clean Air Act have little cost associated with them.
B)   health benefits from higher clean air standards should be questioned, particularly with regard to ozone.
C)   businesses may be forced to find more efficient ways to operate in meeting new clean air standards.
D)   all of the above are not arguments offered.

Question 14

According to Application 14.2, "Cases Involving the Clayton Act and Its Amendments,"price discrimination was an important consideration in:

Accepted Answer

A)   Volvo Trucks North America, Inc. vs Reeder-Simco GMC, Inc.
B)   United States v. Philadelphia National Bank.
C)   International Business Machine Corp. v. United States.
D)   all of the above.

Question 15

Which of the following statements about regulatory agencies is true?

Accepted Answer

A)   An agency may make detailed rules and regulations that businesses under its jurisdiction must follow.
B)   A company that disagrees with an agency rule or opinion is not allowed to appeal its case to a court of law.
C)   An agency does not have the power to enforce its own rules and regulations, or to punish those that do not comply.
D)   The authority given to a regulatory agency in its enabling legislation is usually stated in very limited terms and in great detail.

Question 16

The increasing internationalization of economic activity:

Accepted Answer

A)   has had no effect on the competitive position of U.S. firms as compared to firms based in other countries.
B)   is improving the competitive position of U.S. firms since the U.S. economy is laissez-faire and other economies are not.
C)   may put U.S. firms at a competitive disadvantage if foreign firms face weaker enforcement of antitrust and regulatory rules.
D)   none of the above.

Question 17

Which of the following is typically a step in the rate setting process by a regulatory commission?

Accepted Answer

A)   A formal filing is made by the firm requesting a change in rates.
B)   The request is evaluated for its reasonableness and formal hearings are held by the commission.
C)   The request is either approved or denied by the regulatory commission.
D)   All of the above.

Question 18

Practices carried out by two or more firms, such as price fixing, which restrict competition in a market:

Accepted Answer

A)   were first outlawed in the Clayton Act of 1914.
B)   are classified as combinations or conspiracies in restraint of trade.
C)   are illegal in most states but are allowed by the federal government.
D)   are of little concern since most markets where this could occur are regulated.

Question 19

Suppose Firm A sells its product to Firm B on the condition that Firm B will not by a similar product from some other firm. This is a __________ arrangement and is considered _________.

Accepted Answer

A)   exclusive dealing; anticompetitive
B)   tying; anticompetitive
C)   forced; competitive
D)   dependent; competitive

Question 20

Strategies designed to restrain trade could include:

Accepted Answer

A)   price fixing.
B)   territorial division.
C)   predatory pricing.
D)   all of the above.

Exam 14: Government and the Markets

The primary purpose of the U.S. antitrust laws is to:

Correct AnswerverifiedShow Answer

Firms A and B are competitors and agree to charge $100.00 for their products. Firms C and D are also competitors in a different market and agree that neither will charge less than $80.00 for its product. The pricing decisions of Firms A and B:

Correct AnswerverifiedShow Answer

Give examples of the formation of joint ventures that could strengthen competition, and that could weaken competition.

Correct AnswerverifiedA joint venture of two firms that result...View AnswerShow Answer

The increasing internationalization of economic activity:

Correct AnswerverifiedShow Answer

The justification for regulation of businesses that provide goods and services that are important to the public well-being is based on:

Correct AnswerverifiedShow Answer

Regulation is designed to:

Correct AnswerverifiedShow Answer

An antitrust suit can be brought against a firm by:

Correct AnswerverifiedShow Answer

Suppose Firm A sells its product to Firm B on the condition that Firm B will not by a similar product from some other firm. This is a __________ arrangement and is considered _________.

Correct AnswerverifiedShow Answer

Practices carried out by two or more firms, such as price fixing, which restrict competition in a market:

Correct AnswerverifiedShow Answer

Which of the following statements about regulatory agencies is true?

Correct AnswerverifiedShow Answer

Federal regulatory agencies and state regulatory agencies have jurisdiction over:

Correct AnswerverifiedShow Answer

Which of the following is typically a step in the rate setting process by a regulatory commission?

Correct AnswerverifiedShow Answer

According to Application 14.2, "Cases Involving the Clayton Act and Its Amendments,"price discrimination was an important consideration in:

Correct AnswerverifiedShow Answer

Strategies designed to restrain trade could include:

Correct AnswerverifiedShow Answer

Government regulation is typically divided into industry regulation and social regulation.

Correct AnswerverifiedShow Answer

What are cost-plus pricing and incentive pricing, and how does each affect economic efficiency?

Correct AnswerverifiedCost-plus pricing allows a firm to earn ...View AnswerShow Answer

Actions by a seller that prevent its suppliers or buyers from dealing with a competitor are:

Correct AnswerverifiedShow Answer

With triple damages a firm:

Correct AnswerverifiedShow Answer

Each of the following is an argument offered in "Up for Debate: Has Our Enthusiasm for Regulation Gone Too Far?" except:

Correct AnswerverifiedShow Answer

The antitrust act directed primarily at price discrimination is the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A joint venture of two firms that result...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose Firm A sells its product to Firm B on the condition that Firm B will not by a similar product from some other firm. This is a __ arrangement and is considered _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cost-plus pricing allows a firm to earn ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified