Question 1

A 2000 ruling by a Federal court found that Microsoft, with its very popular Windows operating system,

Accepted Answer

A)   controlled 95 percent of the PC operating system market and thus was an illegal monopoly.
B)   used anticompetitive practices to maintain and broaden its monopoly power.
C)   illegally lobbied members of Congress to obtain monopoly patents.
D)   conspired to fix prices on its Windows software.E) A) and C)
F) B) and D)

Question 2

If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on the "structuralist" perspective will increase.

Accepted Answer

A) True 
 B)False

Question 3

The degree of strictness in the enforcement of antitrust laws often depends on

Accepted Answer

A)   political appointments.
B)   the rule of reason.
C)   use of the Herfindahl index.
D)   per se violations.E) B) and D)
F) B) and C)

Question 4

The view that the antitrust laws should be enforced relatively leniently because of the tendency for monopoly power to erode over time is known as the

Accepted Answer

A)   structuralist view of antitrust.
B)   behavioralist view of antitrust.
C)   laissez-faire perspective on antitrust.
D)   active antitrust perspective.E) A) and D)
F) A) and C)

Question 5

All of the following can file antitrust charges under the Sherman Act except

Accepted Answer

A)   the U.S. Justice Department.
B)   state attorneys general.
C)   injured private parties.
D)   the Federal Energy Regulatory Commission.E) B) and D)
F) A) and B)

Question 6

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

Accepted Answer

A)   more firms will enter the market.
B)   it will be unable to remain in business.
C)   the firm is a natural monopoly.
D)   the firm is able to earn only a normal profit.E) A) and B)
F) A) and C)

Question 7

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Accepted Answer

A) True 
 B)False

Question 8

Which type of merger is most likely to be the focus of antitrust scrutiny and enforcement?

Accepted Answer

A)   conglomerate
B)   horizontal
C)   vertical
D)   naturalE) A) and C)
F) C) and D)

Question 9

In 2013, Apple was convicted, along with five publishers, including Harper Collins, Penguin, and Macmillan, of which antitrust violation?

Accepted Answer

A)   monopoly structure
B)   price-fixing
C)   tying contracts
D)   dividing up the marketE) A) and C)
F) B) and C)

Question 10

What development in the 1970s and 1980s is considered one of the most extensive experiments in industrial policy in the last half-century?

Accepted Answer

A)   extensive antitrust enforcement
B)   increased breakups of monopolies
C)   deregulation of industries
D)   fostering natural monopoliesE) C) and D)
F) A) and B)

Question 11

The legislation that prohibits the acquisition of assets of another company if the transaction would significantly reduce competition, thereby closing a loophole in the Clayton Act, is the

Accepted Answer

A)   Sherman Act.
B)   Federal Trade Commission Act.
C)   Wheeler-Lea Act.
D)   Celler-Kefauver Act.E) A) and C)
F) All of the above

Question 12

If Tyson Corporation, a firm that raises and processes chickens, combined with Kentucky Fried Chicken, the resulting merger would be an example of a

Accepted Answer

A)   horizontal merger.
B)   geographic merger.
C)   vertical merger.
D)   conglomerate merger.E) B) and D)
F) A) and B)

Question 13

Which act sharpened and clarified the provisions of the Sherman Act and sought to outlaw the techniques that firms might use to gain monopoly power?

Accepted Answer

A)   Clayton Act
B)   Wheeler-Lea Act
C)   Celler-Kefauver Act
D)   Federal Trade Commission ActE) C) and D)
F) None of the above

Question 14

Legislation designed to regulate natural monopolies would be based on which theory of regulation?

Accepted Answer

A)   social
B)   legal cartel
C)   public interest
D)   price-fixingE) A) and C)
F) None of the above

Question 15

Movie producers A, B, and C secretly meet and agree to release their summer blockbuster films in sequence, rather than at the same time. The U.S. Justice Department learns of the agreement and files an antitrust suit. The federal government would most likely file charges under the

Accepted Answer

A)   Sherman Act, Section 1.
B)   Sherman Act, Section 2.
C)   Clayton Act.
D)   Federal Trade Commission Act.E) B) and D)
F) B) and C)

Question 16

A major difference between industrial regulation and social regulation is that industrial regulation

Accepted Answer

A)   covers many industries across the economy.
B)   has expanded rapidly since the 1970s.
C)   is targeted at the prices charged, the costs of production, and amount of profit.
D)   focuses on product design, employment conditions, and the production process.E) None of the above
F) B) and C)

Question 17

Antitrust policy pertains to government regulation of firms' prices within selected industries, such as utilities.

Accepted Answer

A) True 
 B)False

Question 18

The theory of regulation developed to deal with "natural monopolies" is called

Accepted Answer

A)   legal cartel theory.
B)   public interest theory.
C)   potential competition theory.
D)   social regulation theory.E) A) and B)
F) B) and D)

Question 19

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a

Accepted Answer

A)   horizontal market.
B)   natural monopoly.
C)   contestable market.
D)   perfect market.E) B) and D)
F) B) and C)

Question 20

Critics of social regulation argue that it

Accepted Answer

A)   causes deflation.
B)   violates the due process clause of the U.S. Constitution.
C)   is a relatively greater burden for small firms than for large firms.
D)   improves allocative efficiency.E) B) and D)
F) None of the above

Exam 21: Antitrust Policy and Regulation

Which act sharpened and clarified the provisions of the Sherman Act and sought to outlaw the techniques that firms might use to gain monopoly power?

Correct AnswerverifiedShow Answer

If Tyson Corporation, a firm that raises and processes chickens, combined with Kentucky Fried Chicken, the resulting merger would be an example of a

Correct AnswerverifiedShow Answer

Antitrust policy pertains to government regulation of firms' prices within selected industries, such as utilities.

Correct AnswerverifiedShow Answer

In 2013, Apple was convicted, along with five publishers, including Harper Collins, Penguin, and Macmillan, of which antitrust violation?

Correct AnswerverifiedShow Answer

The legislation that prohibits the acquisition of assets of another company if the transaction would significantly reduce competition, thereby closing a loophole in the Clayton Act, is the

Correct AnswerverifiedShow Answer

A major difference between industrial regulation and social regulation is that industrial regulation

Correct AnswerverifiedShow Answer

The Americans with Disabilities Act of 1990 is an example of industrial regulation.

Correct AnswerverifiedShow Answer

All of the following can file antitrust charges under the Sherman Act except

Correct AnswerverifiedShow Answer

Critics of social regulation argue that it

Correct AnswerverifiedShow Answer

A market in which the entire demand for a good or service can be satisfied at the least cost by a single firm is a

Correct AnswerverifiedShow Answer

Which type of merger is most likely to be the focus of antitrust scrutiny and enforcement?

Correct AnswerverifiedShow Answer

The theory of regulation developed to deal with "natural monopolies" is called

Correct AnswerverifiedShow Answer

What development in the 1970s and 1980s is considered one of the most extensive experiments in industrial policy in the last half-century?

Correct AnswerverifiedShow Answer

The degree of strictness in the enforcement of antitrust laws often depends on

Correct AnswerverifiedShow Answer

Generally speaking, if a firm faces decreasing average total costs of production throughout its entire range of output, then

Correct AnswerverifiedShow Answer

The view that the antitrust laws should be enforced relatively leniently because of the tendency for monopoly power to erode over time is known as the

Correct AnswerverifiedShow Answer

Movie producers A, B, and C secretly meet and agree to release their summer blockbuster films in sequence, rather than at the same time. The U.S. Justice Department learns of the agreement and files an antitrust suit. The federal government would most likely file charges under the

Correct AnswerverifiedShow Answer

A 2000 ruling by a Federal court found that Microsoft, with its very popular Windows operating system,

Correct AnswerverifiedShow Answer

Legislation designed to regulate natural monopolies would be based on which theory of regulation?

Correct AnswerverifiedShow Answer

If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on the "structuralist" perspective will increase.

Correct AnswerverifiedShow Answer

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