Question 1

Shepherd argues that antitrust policy accounted for ____ of the increase in competition.

Accepted Answer

Shepherd argues that antitrust policy accounted for two-fifths of the increase in competition.

Question 2

In 13 major industries studied by Shepherd,an increase in imports of foreign products was attractive to consumers because of _____

Accepted Answer

According to the information given in the question, an increase in imports of foreign products was attractive to consumers because of the higher quality and lower price of the imports. Therefore, the best choice is C - the higher quality and lower price of the imports.

Question 3

According to William Shepherd's examination of competitive trends in the U.S.economy,a single firm which controls the entire market and is able to block entry _____

Accepted Answer

A single firm that controls the entire market and can block entry is usually considered a pure monopoly.

Question 4

A tight oligopoly refers to _____

Accepted Answer

A tight oligopoly is an industry in which the top four firms supply more than 60 percent of the market, have stable market shares, and cooperate with each other. Thus, choice B is the only option that fits this definition. The other answer choices either describe a monopolistic market structure (choice A and D), or do not include the necessary elements of a tight oligopoly (choice C and E).

Question 5

The largest mergers in history have taken place since the late 1990s,in all of the following industries except for _____

Accepted Answer

The largest mergers in history have primarily occurred in industries such as banking, radio and television, insurance, and health services, but not significantly in the steel industry, which has seen consolidation but not on the scale of the other sectors mentioned.

Question 6

According to William Shepherd's examination of competitive trends in the U.S.economy,the industry of a firm that faces no or very little competition and contributes more than 50 percent of the market supply _____

Accepted Answer

A firm that faces no or very little competition and contributes more than 50 percent of the market supply is referred to as a dominant firm. A pure monopoly involves a single seller dominating the market, while tight oligopoly refers to a small number of firms dominating the market. Effective competition refers to a situation where there are multiple firms competing in a market, while monopolistic competition involves many firms selling similar but differentiated products. Therefore, the best choice is B - a dominant firm.

Question 7

According to Shepherd,trucking,_____,securities trading,banking,and telecommunications were among the industries deregulated between 1958 and 2000.

Accepted Answer

The word "deregulated" suggests that the industries listed have had government regulations removed or reduced. The option that best fits this description is airlines, as the Airline Deregulation Act of 1978 removed government control over fares, routes, and market entry for commercial airlines. The other options listed have not experienced significant deregulation during the time period stated.

Question 8

How did U.S.producers react to competition from foreign imports between 1958 and 1988?

Accepted Answer

U.S. producers sought protection from foreign competitors through trade barriers, such as tariffs and quotas, during this period. This was in response to increased competition from foreign imports, which threatened the viability of some domestic industries.

Question 9

Which of the following did not lead to an increase in competition in the United States between 1958 and 1988?

Accepted Answer

Conglomerate mergers actually lead to a decrease in competition, as they allowed larger companies to control multiple industries and reduce competition in each industry. Antitrust activity, deregulation of transportation industries, deregulation of the banking sector, and increased imports all lead to an increase in competition during this time period.

Question 10

In recent years,government shifted from rules that restrict big mergers to _____

Accepted Answer

In recent years, governments have favored a more flexible approach that allows big companies to merge. This approach is seen as a way to boost economic growth and competition, especially in industries where scale is important, such as technology and telecommunications. Governments are still required to follow antitrust laws to ensure that mergers do not harm competition and consumers.

Question 11

Which of the following statements is true?

Accepted Answer

Increased international trade has led to increased competition in the U.S. economy as firms are no longer competing only with domestic producers but also with foreign producers. This has led to changes in industries, including the exit of some firms, and the emergence of new global players. The other options do not accurately reflect the relationship between international trade and competition in the U.S. economy.

Question 12

Which of the following is an example of an effectively competitive market?

Accepted Answer

An effectively competitive market is one that has low concentration, few barriers to entry, and little or no collusion among firms. In such a market, there are many competitors, each with a small market share, and they must compete vigorously to win customers. This type of market is believed to lead to the most efficient allocation of resources and the lowest prices for consumers. Option A describes an oligopoly market where firms cooperate with each other, thus limiting competition. Option B describes an oligopoly market where firms compete with each other, but the high concentration creates a risk of collusion. Option D describes a competitive market with significant barriers to entry, which would limit the number of firms and potentially limit competition. Option E describes a market with a dominant firm, limiting competition from other firms.

Question 13

According to Shepherd,which of the following is not a group in which industries could be placed based on their competitiveness?

Accepted Answer

Shepherd proposed four groups for industries based on their competitiveness - dominant firms, tight oligopolies, effective competition, and pure monopolies. Pure monopsonies, on the other hand, refer to a market structure where there is only one buyer for a particular product or service. This is not one of the groups proposed by Shepherd, therefore D is the correct answer.

Question 14

According to _____,competition in the U.S.economy increased between 1958 and 2000 because of a reduction in government intervention.

Accepted Answer

William Shepherd argued that competition in the U.S. economy increased between 1958 and 2000 due to a reduction in government intervention, focusing on the dynamics of market competition and regulatory impacts.

Question 15

U.S.producers faced certain disadvantages as imports rose in 13 major industries studied by Shepherd.The producers initially responded to this by _____

Accepted Answer

The producers initially responded to the disadvantages by seeking trade barriers, as a way to protect their domestic market from foreign competition.

Question 16

According to William Shepherd's examination of competitive trends in the U.S.economy,a dominant firm _____

Accepted Answer

A dominant firm is one that has over half the market share with no close rivals, as stated in option B. Option A is incorrect as a dominant firm need not be a pure monopoly. Option C talks about an oligopoly, not a dominant firm. Option D may describe a monopolistically competitive market, but not a dominant firm. Option E describes collusion, which is illegal and not a characteristic of a dominant firm.

Question 17

According to William Shepherd's examination of competitive trends in the U.S.economy,if the top four firms supply more than half of market output and the market share of each firm is stable,the industry _____

Accepted Answer

When the top four firms supply more than half of market output and the market share of each firm is stable, the industry is considered a tight oligopoly. This means that there are only a few dominant firms in the market, which can lead to reduced competition and potential antitrust concerns.

Question 18

Shepherd argues that deregulation accounted for ____ of the increase in competition.

Accepted Answer

The answer of Shepherd argues that deregulation accounted for ____...

Question 19

Which of the following led to an increase in competition in the United States between 1958 and 1988?

Accepted Answer

An increase in imports would lead to an increase in competition as domestic companies would have to compete with foreign companies for market share.

Question 20

According to William Shepherd's examination of competitive trends in the U.S.economy,if firms in the industry exhibit low concentration,low entry barriers,and little or no collusion,then the industry _____

Accepted Answer

When firms in an industry exhibit low concentration, low entry barriers, and little or no collusion, it implies that there is effective competition in the market. Therefore, the best choice is D, which states that the industry demonstrates effective competition.

Quiz 15: Economic Regulation and Antitrust Policy