Question 1

The Clayton Act prohibits all horizontal mergers,regardless of their economic consequences.

Accepted Answer

The Clayton Act does not prohibit all horizontal mergers. It only prohibits those that may substantially lessen competition or tend to create a monopoly.

Question 2

The government often enacts regulation that benefits producers because

Accepted Answer

Producers have a strong interest in matters that affect their specialized source of income. The government often enacts regulations that benefit producers because they want to support and protect the industries that generate revenue for the country. These regulations can include subsidies, tax breaks, and protectionist policies. By supporting producers, the government hopes to stimulate economic growth and encourage job creation.

Question 3

The Sherman Act

Accepted Answer

The Sherman Act was enacted in 1890 and its primary purpose was to prohibit and outlaw restraints of trade, such as monopolies and cartels. It was aimed at promoting and protecting competition in the market, by forbidding any behavior that could lead to an unreasonable restriction of trade or commerce.

Question 4

The purpose of antitrust laws is to

Accepted Answer

The purpose of antitrust laws is to reduce or prevent anticompetitive practices such as price fixing, collusion, monopolization, and unfair business practices in order to promote competition and protect consumers.

Question 5

Price discrimination that substantially lessens competition is prohibited by the Clayton Act.

Accepted Answer

The Clayton Act prohibits price discrimination that substantially lessens competition.

Question 6

Antitrust policy is designed to

Accepted Answer

Antitrust policy is designed to promote competition and reduce anticompetitive behavior. Its goal is to prevent the formation of monopolies, which can lead to higher prices, reduced output, and decreased innovation. Antitrust policy also seeks to prevent firms from engaging in anticompetitive practices, such as price fixing or collusion, that harm competition and consumers.

Question 7

The Sherman Antitrust Act makes it unlawful for firms to collude to restrain trade.

Accepted Answer

The Sherman Antitrust Act, passed in 1890, prohibits any collusion that restrains trade or harms competition in the United States.

Question 8

The capture theory of regulation,espoused by George Stigler,asserts that

Accepted Answer

The capture theory of regulation, espoused by George Stigler, asserts that regulatory agencies are "captured" by the producers they are supposed to regulate, resulting in regulation that primarily favors the interests of producers rather than consumers. This capture may occur through various means, such as industry lobbying, regulatory capture, or the revolving door between industry and government positions.

Question 9

Which of the following groups benefits from regulation,according to the special interest theory of regulation?

Accepted Answer

According to the special interest theory of regulation, only certain producers benefit from regulation. This is because they have the resources and influence to lobby for regulations that give them an advantage over their competitors. Consumers as a whole do not benefit, and in some cases, may even be harmed by regulations that lead to higher prices or less competition. Therefore, choices A, B, C and E are not correct.

Question 10

According to the special interest theory,

Accepted Answer

The answer of According to the special interest theory,
...

Question 11

A monopoly or group of firms acting together as a monopoly

Accepted Answer

The answer of A monopoly or group of firms acting...

Question 12

If ball-bearing producers support proposed regulation of their industry,then it is likely that

Accepted Answer

The answer of If ball-bearing producers support proposed regulation of...

Question 13

In the late nineteenth century,technological improvements and cheaper transportation in the United States led to

Accepted Answer

Technological improvements and cheaper transportation during the late nineteenth century led to an increase in minimum efficient scale in many industries. This was due to the fact that companies had the ability to produce goods on a larger scale and therefore, achieve lower average costs of production. As a result, larger producers were better able to compete and smaller producers were forced out of the market.

Question 14

U.S.manufacturers formed trusts in the late 1880s because

Accepted Answer

The answer of U.S.manufacturers formed trusts in the late 1880s...

Question 15

The Sherman Antitrust Act of 1890

Accepted Answer

The Sherman Antitrust Act was not fully enforced at first, and it took years for the government to successfully use the legislation to break up major trusts and monopolies. Initially, many courts were hesitant to apply the law and it was not until the 1904 Supreme Court case of Northern Securities Co. v. United States that the Act was used to break up a major trust.

Question 16

A physicians' professional association supports legislation seeking higher quality medical care.According to the special interest theory of regulation,who likely will benefit most from this legislation?

Accepted Answer

The special interest theory of regulation suggests that regulation is often driven by the self-interest of groups seeking to benefit from it. In this case, the physicians' professional association is supporting legislation for higher quality medical care, which would likely result in increased prices for medical care. Therefore, physicians are the group that would benefit the most from this legislation.

Question 17

Antitrust laws attempt to promote competition by controlling

Accepted Answer

Antitrust laws attempt to promote competition by controlling both market structure and conduct. They aim to prevent the formation of monopolies or oligopolies (market structure) as well as anti-competitive practices like price-fixing or exclusive dealing (market conduct).

Question 18

The Sherman Act

Accepted Answer

The Sherman Act, passed in 1890, prohibits any agreements or actions that restrain trade, including monopolies and cartels. It is the first federal antitrust law and aimed to promote competition in the marketplace.

Question 19

When were the first federal antitrust laws enacted in the United States?

Accepted Answer

The first federal antitrust laws, the Sherman Antitrust Act and the Clayton Antitrust Act, were enacted in the late 1800s and early 1900s, around the turn of the twentieth century.

Question 20

According to the special interest theory,the licensing of beauticians would be

Accepted Answer

According to the special interest theory, the licensing of beauticians would be desired by some beauticians in order to restrict entry into their profession, thereby reducing competition and potentially increasing their incomes. It is not necessarily desired by consumers, beauticians as a whole, or all beauty salons. The government may be involved in implementing licensing requirements, but it may be at the urging of the special interest group of beauticians seeking to restrict entry.

Quiz 15: Economic Regulation and Antitrust Policy

The Clayton Act prohibits all horizontal mergers,regardless of their economic consequences.

The government often enacts regulation that benefits producers because

The Sherman Act

The purpose of antitrust laws is to

Price discrimination that substantially lessens competition is prohibited by the Clayton Act.

Antitrust policy is designed to

The Sherman Antitrust Act makes it unlawful for firms to collude to restrain trade.

The capture theory of regulation,espoused by George Stigler,asserts that

Which of the following groups benefits from regulation,according to the special interest theory of regulation?

According to the special interest theory,

A monopoly or group of firms acting together as a monopoly

If ball-bearing producers support proposed regulation of their industry,then it is likely that

In the late nineteenth century,technological improvements and cheaper transportation in the United States led to

U.S.manufacturers formed trusts in the late 1880s because

The Sherman Antitrust Act of 1890

A physicians' professional association supports legislation seeking higher quality medical care.According to the special interest theory of regulation,who likely will benefit most from this legislation?

Antitrust laws attempt to promote competition by controlling

The Sherman Act

When were the first federal antitrust laws enacted in the United States?

According to the special interest theory,the licensing of beauticians would be