Question 1

The International Communication Network which is the successor of GATT settles trade disputes among its member countries.

Accepted Answer

A) True 
 B)False

Question 2

Privatization occurs when a state owned firm is transferred to private ownership.

Accepted Answer

A) True 
 B)False

Question 3

Under the License Raj system in India:

Accepted Answer

A)  the producers having the licence could produce as much as they wanted.
B)  the producers were allowed to manufacture goods only for the government.
C)  only the producers having the licence were allowed to import inputs from abroad.
D)  producing beyond the specified limit was a punishable offence.
E)  the producers could only produce to meet their subsistence needs.

Question 4

International regulation occurs at two levels,one in which a specific government regulates the activities of individual firms operating within the country,and another in which several nations are involved.

Accepted Answer

A) True 
 B)False

Question 5

In a natural monopoly,government regulation is often used to ensure more beneficial price and output combinations for consumers in the market than would exist in the absence of regulation.

Accepted Answer

A) True 
 B)False

Question 6

When a monopoly is regulated it is required to sell lower output at a lower price.

Accepted Answer

A) True 
 B)False

Question 7

The recession beginning in 2007 led many governments to begin encouraging trade.

Accepted Answer

A) True 
 B)False

Question 8

According to the per se rule,activities that were potentially monopolizing tactics were illegal.

Accepted Answer

A) True 
 B)False

Question 9

Antitrust laws in the United States rely more on economic theory and the rule of reason approach,whereas the European Union relies more on the per se approach.

Accepted Answer

A) True 
 B)False

Question 10

Actions against alleged violators of the antitrust statutes may be initiated by the Justice Department,by the Federal Trade Commission,and by private plaintiffs.

Accepted Answer

A) True 
 B)False

Question 11

Most natural monopolies are regulated at some level by government because:

Accepted Answer

A)  an unregulated natural monopolist would produce an inefficiently low level of output.
B)  an unregulated natural monopolist would produce only for government bureaucrats.
C)  an unregulated natural monopolist would charge an inefficiently low price in the market.
D)  an unregulated natural monopolist would charge an inefficiently high price in the market.
E)  an unregulated natural monopolist would produce a large quantity at a high price.

Question 12

Which of the following entities is able to sue a firm for alleged antitrust misbehavior in the U.S.?

Accepted Answer

A)  Department of Illegal Affairs
B)  Department of State
C)  Department of Homeland Security
D)  Department of Justice
E)  Department of Labor

Question 13

When regulators require that a natural monopoly sets price equal to average total cost:

Accepted Answer

A)  it is said to be allowing a fair rate of return.
B)  the firm earns a super normal profit.
C)  the firm shuts down permanently.
D)  the firm operates at the profit-maximizing level of output.
E)  the firm shuts down temporarily.

Question 14

In the United States,monopoly regulation began primarily because:

Accepted Answer

A)  there were no natural monopolies in the real world.
B)  monopolies were especially guilty of unsafe industrial practices.
C)  monopolies did not typically follow occupational and safety rules.
D)  monopolies tended to restrict output and raise prices.
E)  most economists believed that the majority of industries were following the purely competitive model.

Question 15

Any kind of social regulation raises the per unit cost of production of a good and hence leads to a loss of producer and consumer surplus.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following practices is notrestricted by the antitrust law in the United States?

Accepted Answer

A)  Contracts and conspiracies in restraint of trade
B)  Attempts to monopolize a market
C)  Mergers that substantially lessen competition
D)  Unfair or deceptive acts of competition
E)  All forms of quality discrimination

Question 17

One reason that governments may intervene in the operation of a business through regulation is to:

Accepted Answer

A)  increase monopoly profits.
B)  reduce the amount of information consumers have about a product.
C)  increase negative externalities.
D)  promote competitive behavior.
E)  decrease positive externalities.

Question 18

One difference between economic and social regulation is that economic regulation usually pertains to a specific industry,whereas social regulation applies most if not all industries.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is most likely to happen if the Federal Trade Commission (FTC)  wins a suit against alleged violators of antitrust law?

Accepted Answer

A)  The FTC will receive compensation up to three times the damage caused.
B)  The FTC will not be able to impose substantial penalties.
C)  The FTC will force firms to break up through dissolution.
D)  The FTC will force firms to merge together.
E)  The FTC will file criminal actions that may result in fines but not prison sentences.

Question 20

In the following figure,the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation. Figure 12.2 1: Supply curve of automobiles prior to regulation S2: Supply curve of automobiles after regulation FG: Clean up cost per unit -Refer to Figure 12.2.The regulation will benefit the society if: A) area BAJ > area 0FIQ2. B) area AECJ > area IGQ1Q2. C) area IGQ1Q2 > area AECJ. D) area BAJ > BAC. E) area 0FIQ2 > area BAJ." class="answers-bank-image d-inline" rel="preload" > In the figure,
D: Demand curve for automobiles
S1: Supply curve of automobiles prior to regulation
S2: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-Refer to Figure 12.2.The regulation will benefit the society if:

Accepted Answer

A)  area BAJ > area 0FIQ2.
B)  area AECJ > area IGQ1Q2.
C)  area IGQ1Q2 > area AECJ.
D)  area BAJ > BAC.
E)  area 0FIQ2 > area BAJ.

Exam 12: Antitrust and Regulation

Actions against alleged violators of the antitrust statutes may be initiated by the Justice Department,by the Federal Trade Commission,and by private plaintiffs.

Correct Answer
verified

The International Communication Network which is the successor of GATT settles trade disputes among its member countries.

Correct Answer
verified

Under the License Raj system in India:

Correct Answer
verified

One reason that governments may intervene in the operation of a business through regulation is to:

Correct Answer
verified

International regulation occurs at two levels,one in which a specific government regulates the activities of individual firms operating within the country,and another in which several nations are involved.

Correct Answer
verified

Most natural monopolies are regulated at some level by government because:

Correct Answer
verified

When a monopoly is regulated it is required to sell lower output at a lower price.

Correct Answer
verified

Which of the following practices is notrestricted by the antitrust law in the United States?

Correct Answer
verified

In the United States,monopoly regulation began primarily because:

Correct Answer
verified

Which of the following entities is able to sue a firm for alleged antitrust misbehavior in the U.S.?

Correct Answer
verified

Correct Answer
verified

One difference between economic and social regulation is that economic regulation usually pertains to a specific industry,whereas social regulation applies most if not all industries.

Correct Answer
verified

In a natural monopoly,government regulation is often used to ensure more beneficial price and output combinations for consumers in the market than would exist in the absence of regulation.

Correct Answer
verified

Which of the following is most likely to happen if the Federal Trade Commission (FTC) wins a suit against alleged violators of antitrust law?

Correct Answer
verified

According to the per se rule,activities that were potentially monopolizing tactics were illegal.

Correct Answer
verified

Any kind of social regulation raises the per unit cost of production of a good and hence leads to a loss of producer and consumer surplus.

Correct Answer
verified

Antitrust laws in the United States rely more on economic theory and the rule of reason approach,whereas the European Union relies more on the per se approach.

Correct Answer
verified

Privatization occurs when a state owned firm is transferred to private ownership.

Correct Answer
verified

The recession beginning in 2007 led many governments to begin encouraging trade.

Correct Answer
verified

When regulators require that a natural monopoly sets price equal to average total cost:

Correct Answer
verified

Exam 12: Antitrust and Regulation

Actions against alleged violators of the antitrust statutes may be initiated by the Justice Department,by the Federal Trade Commission,and by private plaintiffs.

Correct AnswerverifiedShow Answer

The International Communication Network which is the successor of GATT settles trade disputes among its member countries.

Correct AnswerverifiedShow Answer

Under the License Raj system in India:

Correct AnswerverifiedShow Answer

One reason that governments may intervene in the operation of a business through regulation is to:

Correct AnswerverifiedShow Answer

International regulation occurs at two levels,one in which a specific government regulates the activities of individual firms operating within the country,and another in which several nations are involved.

Correct AnswerverifiedShow Answer

Most natural monopolies are regulated at some level by government because:

Correct AnswerverifiedShow Answer

When a monopoly is regulated it is required to sell lower output at a lower price.

Correct AnswerverifiedShow Answer

Which of the following practices is notrestricted by the antitrust law in the United States?

Correct AnswerverifiedShow Answer

In the United States,monopoly regulation began primarily because:

Correct AnswerverifiedShow Answer

Which of the following entities is able to sue a firm for alleged antitrust misbehavior in the U.S.?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One difference between economic and social regulation is that economic regulation usually pertains to a specific industry,whereas social regulation applies most if not all industries.

Correct AnswerverifiedShow Answer

In a natural monopoly,government regulation is often used to ensure more beneficial price and output combinations for consumers in the market than would exist in the absence of regulation.

Correct AnswerverifiedShow Answer

Which of the following is most likely to happen if the Federal Trade Commission (FTC) wins a suit against alleged violators of antitrust law?

Correct AnswerverifiedShow Answer

According to the per se rule,activities that were potentially monopolizing tactics were illegal.

Correct AnswerverifiedShow Answer

Any kind of social regulation raises the per unit cost of production of a good and hence leads to a loss of producer and consumer surplus.

Correct AnswerverifiedShow Answer

Antitrust laws in the United States rely more on economic theory and the rule of reason approach,whereas the European Union relies more on the per se approach.

Correct AnswerverifiedShow Answer

Privatization occurs when a state owned firm is transferred to private ownership.

Correct AnswerverifiedShow Answer

The recession beginning in 2007 led many governments to begin encouraging trade.

Correct AnswerverifiedShow Answer

When regulators require that a natural monopoly sets price equal to average total cost:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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