Question 1

Which one of the following is concerned with social regulation?

Accepted Answer

The Equal Employment Opportunity Commission (EEOC) is concerned with social regulation as it enforces laws against workplace discrimination, ensuring equal opportunity in employment.

Question 2

Social regulation differs from industrial regulation in that

Accepted Answer

Social regulation applies to a wide range of industries focusing on issues like health, safety, and the environment, whereas industrial regulation is specific to certain industries, often focusing on market competition and economic aspects.

Question 3

Defenders of social regulation point out that

Accepted Answer

Defenders argue that critics often overlook the social benefits that regulations provide, which can outweigh the administrative and compliance costs.

Question 4

According to the Consider This box "Of Sea Fish and eBooks (and Other Things in Common)", which of the following firms were convicted for horizontal price-fixing?

Accepted Answer

Apple, Harper Collins, and Penguin were convicted for horizontal price-fixing in the context of e-books, as they collaborated to set the prices of e-books, which is an illegal practice under antitrust laws.

Question 5

The Consider This box "Of Sea Fish and eBooks (and Other Things in Common)" lists examples of recent antitrust cases involving

Accepted Answer

The answer of The Consider This box "Of Sea Fish...

Question 6

Government regulation of firms' prices or "rates" in selected industries is the focus of

Accepted Answer

Industrial regulation focuses on controlling the prices or rates charged by firms within certain industries, typically those considered natural monopolies or where competition is limited, to protect consumers and ensure fair pricing.

Question 7

Dominant firms that formed in several industries in the U.S. in the 1870s and 1880s, which assigned control to a single decision group, were referred to as

Accepted Answer

Trusts were dominant firms or groups of firms that came to control entire industries by placing control under a single group of trustees, who would manage the consolidation of resources, production, and distribution to dominate the market. This was a common practice in the 1870s and 1880s in the United States.

Question 8

Critics of social regulation argue that it

Accepted Answer

Social regulation often imposes fixed costs for compliance (such as the cost of pollution control equipment or the cost of modifying products to meet safety standards), which represent a larger proportion of a small firm's total costs compared to a large firm. This can make it more burdensome for small firms to comply with these regulations, affecting their competitiveness and profitability.

Question 9

The basic purpose of antitrust laws is to

Accepted Answer

Antitrust laws are designed to prevent and reduce the practice of monopolies, thereby ensuring competition in the marketplace. This is to protect consumers from the disadvantages of monopolistic practices, such as higher prices and reduced innovation.

Question 10

What problem is created for antitrust regulators by online pricing algorithms?

Accepted Answer

The challenge for antitrust regulators with online pricing algorithms is that even if these algorithms result in prices that seem collusive, the absence of explicit agreements among firms complicates legal action under existing antitrust laws.

Question 11

In 1994, the U.S. Department of Justice stopped which of the following practices?

Accepted Answer

In 1994, the U.S. Department of Justice stopped airlines from preposting fare changes, which was a form of tacit collusion. This practice allowed airlines to signal price changes to competitors, leading to coordinated pricing strategies without explicit agreements.

Question 12

Congressional representatives have called for extensive ergonomics regulations to reduce strains and injuries from repetitive activities by workers. Such regulation, if passed, would be a good example of

Accepted Answer

Social regulation refers to government-imposed restrictions intended to protect public health and safety, as well as to reduce risks and negative externalities. Ergonomics regulations aimed at reducing strains and injuries from repetitive activities by workers fall under this category because they are designed to protect workers' health and safety in the workplace.

Question 13

Social, as distinct from industrial, regulation is the major focus of the

Accepted Answer

The Consumer Product Safety Commission focuses on social regulation by ensuring the safety of consumer products, which directly impacts the well-being and health of the public, distinguishing it from industrial regulation that typically focuses on economic efficiency and competition within industries.

Question 14

The optimal amount of social regulation occurs where the marginal benefit of such regulation

Accepted Answer

The optimal amount of social regulation occurs where the marginal benefit equals the marginal cost, ensuring that the resources are used efficiently and the net benefit of regulation is maximized.

Question 15

Laws and government actions designed to prevent monopoly and to promote competition are the focus of

Accepted Answer

Antitrust policy is specifically aimed at preventing monopolies and fostering competition in the market to ensure fair practices and prices for consumers.

Question 16

Antitrust laws are essentially

Accepted Answer

Antitrust laws are designed to prevent monopolies and promote competition, ensuring that no single entity can control an entire market to the detriment of consumers and other businesses.

Question 17

According to the Consider This box "Of Sea Fish and eBooks (and Other Things in Common)", firms from which country, in 2018, were fined for colluding to fix the price of construction rebar in the United States?

Accepted Answer

In 2018, firms from Korea were fined for colluding to fix the price of construction rebar in the United States.

Question 18

Google was fined $5 billion by European Union antitrust officials for

Accepted Answer

Google was fined for abusing its Android market dominance by forcing device manufacturers to pre-install Google Search and Chrome browser, thereby stifacing competition.

Question 19

Which of the following results will not occur in a monopolistic market?

Accepted Answer

In a monopolistic market, the output level is typically lower than in a competitive market because the monopolist restricts output to raise prices and maximize profits, unlike in a competitive market where firms produce at a level where price equals marginal cost.

Question 20

In 2000, Microsoft was fined $2.7 billion for

Accepted Answer

Microsoft was fined for using anticompetitive practices to maintain its monopoly in the market for Internet browsers, particularly by bundling Internet Explorer with its Windows operating system.

Quiz 21: Antitrust Policy and Regulation