Chapter 18 – Antitrust Policy and Regulation
60. Which of the following is a per se violation?
61. If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government
can still take the conspiring firm to court for improper conduct. This situation would be an
example of:
62. Which business practice is rarely challenged by the government under antitrust laws?
Chapter 18 – Antitrust Policy and Regulation
63. The degree of strictness in enforcement of antitrust laws often depends on:
64. Antitrust legislation in the United States in recent decades has:
65. Most economists agree that, overall, U.S. antitrust policy has been most successful in:
Chapter 18 – Antitrust Policy and Regulation
66. Which of the following has tended to reduce the importance of antitrust law according to
some economists?
67. The condition where a single firm can supply an entire market at a lower unit cost than
could a number of competing firms defines a:
68. Generally speaking, if a firm faces decreasing average total costs of production throughout
its range of output, then:
Chapter 18 – Antitrust Policy and Regulation
69. If economies of scale in an industry are so extensive that a single firm can supply the
entire market at lower unit cost than could any number of competing firms, this industry is
called a(n):
70. Which of the following is most likely to be a natural monopoly?
71. What is a major characteristic of a natural monopoly?
Chapter 18 – Antitrust Policy and Regulation
72. What is most likely to happen as the output of a natural monopoly increases over the
range of market demand?
73. The two of promoting better outcomes when a natural monopoly exists are:
74. The principal objective of industrial regulation is to:
Chapter 18 – Antitrust Policy and Regulation
75. An example of a government organization involved primarily in industrial regulation
would be the:
76. Legislation designed to regulate natural monopolies would be based on which theory of
regulation?
77. Which would be an example of public ownership as a response to natural monopolies?
Chapter 18 – Antitrust Policy and Regulation
78. Which is the most valid criticism of the regulation of natural monopolies and other firms
subject to regulation by regulatory commissions?
79. A labor market application of the legal cartel theory would be:
80. Which theory of regulation assumes that the industry wants to be regulated?
Chapter 18 – Antitrust Policy and Regulation
81. Regulation of business, according to the legal cartel theory, stems from:
82. The public interest theory of regulation:
83. The effectiveness of regulation is sometimes criticized because:
Chapter 18 – Antitrust Policy and Regulation
84. Which legislative act provided for the industrial regulation of the railroad industry by the
Federal government?
85. The theory of regulation designed to deal with “natural monopolies” is called:
86. What development in the 1970s and 1980s is considered one of the most extensive
experiments in industrial policy in the last half-century?
Chapter 18 – Antitrust Policy and Regulation
87. Most economists agree that deregulation in the 1970s and 1980s brought much benefits to
consumers in the following industries, except:
88. The general conclusion of most economists about deregulation of previously regulated
industries in the United States is that it resulted in:
89. Government regulation concerning the conditions under which goods are produced and
the physical qualities of the goods is known as:
Chapter 18 – Antitrust Policy and Regulation
90. Which of the following is mainly involved in social regulation?
91. Social regulation:
92. The Occupational Safety and Health Administration is mainly involved in:
Chapter 18 – Antitrust Policy and Regulation
93. Which of the following is a primary concern of social regulation?
94. A major difference between industrial regulation and social regulation is that industrial
regulation:
95. Supporters of social regulation contend that:
Chapter 18 – Antitrust Policy and Regulation
96. A criticism of social regulation is that it:
97. A caption for a reminder to proponents of social regulation is that:
98. A caption as a retort to opponents of social regulation would be:
Chapter 18 – Antitrust Policy and Regulation
99. Critics of social regulation would argue that it:
100. Which is not a major criticism of social regulation?
101. Which company was convicted of fixing the prices of an additive to livestock feed, citric
acid, and a sweetener made from corn?
Chapter 18 – Antitrust Policy and Regulation
102. Which two companies were convicted in a price-fixing case involving catfish?
103. Sotheby’s and Christy’s were found guilty of conspiring over a 6-year period to:
104. The Federal court case against Microsoft, filed in 1998, was based on the:
Chapter 18 – Antitrust Policy and Regulation
105. A 2000 ruling by a Federal court found that Microsoft:
106. In the Microsoft antitrust case the final settlement with the U.S. government in 2002
involved:
107. The initial proposed remedy for Microsoft violations of antitrust laws in the 2000 ruling
from a Federal District Court was to:
Chapter 18 – Antitrust Policy and Regulation
108. The cornerstone of antitrust policy in the United States is generally considered to be the
Sherman Antitrust Act of 1890.
109. All price discrimination is deemed illegal in antitrust legislation.
110. Unfair advertising practices are investigated by the Federal Trade Commission.
111. The rule of reason in antitrust applications means that if a firm has a dominant share of
the market, it stands to reason that it will exploit its monopoly power to gain an unfair
advantage over its rivals.
Chapter 18 – Antitrust Policy and Regulation
112. “Behaviorists” in antitrust applications believe that a firm that dominates a market is not
necessarily behaving unfairly.
113. 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.
114. A conglomerate merger is a merger between firms at different stages of the production
process of a product, such as a merger between a flour milling company and a baking
company.
115. Strict enforcement of antitrust laws will generally complement the economic objective of
encouraging new technologies that require large amounts of capital investment.
Chapter 18 – Antitrust Policy and Regulation
116. Public regulation rather than public ownership has been the primary means used in the
United States to ensure that the behavior of natural monopolists is socially acceptable.
117. If the government regulates a natural monopoly and sets a “fair return” pricing policy,
then the regulated firm will have greater incentive to improve its operating efficiency.
118. According to the legal cartel theory of regulation, firms desire to have government
regulation because it protects them from competition.
119. Most economists conclude that deregulation has reduced prices and led to more
competition in deregulated industries.
Chapter 18 – Antitrust Policy and Regulation
120. Social regulation consists of regulating the behavior of people in society in order to
promote the safety and harmony in neighborhoods.
121. One good example of a government agency involved mainly in social regulation is the
Food and Drug Administration.
122. Supporters of social regulation contend that it has provided net benefits to society in the
form of greater safety, a better environment, and less discrimination.