Question 1

Marginal cost pricing is a regulatory method that stipulates that the firm charge a price equal to

Accepted Answer

A)  deadweight loss.
B)  marginal cost.
C)  average cost.
D)  marginal revenue.
E)  fixed cost.F) A) and D)
G) B) and E)

Question 2

When a firm uses average total cost pricing, the price is

Accepted Answer

A)  equal to marginal cost.
B)  below the firm's marginal cost.
C)  below the unregulated monopoly price.
D)  equal to the unregulated monopoly price.
E)  above the unregulated monopoly price.F) All of the above
G) B) and C)

Question 3

Regulation of a natural monopoly could give an economy the advantages of

Accepted Answer

A)  one-firm efficiency without competition-like behavior.
B)  competition-like behavior but not one-firm efficiency.
C)  one-firm efficiency and competition-like behavior.
D)  neither one-firm efficiency nor competition-like behavior.
E)  dealing with only one firm rather than many firms as in perfect competition.F) A) and D)
G) B) and E)

Question 4

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Accepted Answer

A) True 
 B)False

Question 5

When a firm uses average total cost pricing,

Accepted Answer

A)  above-normal profits are made.
B)  economic profits equal zero.
C)  there is not enough money to pay investors in the firm their opportunity costs.
D)  price equals marginal cost.
E)  there is not enough money to pay the managers.F) C) and E)
G) A) and E)

Question 6

A merger of firms with low price-cost margins is less likely to be challenged by the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 7

Antitrust policy includes all of the following except

Accepted Answer

A)   and breaking up existing firms with significant market power.
B)  preventing mergers that would increase monopoly power significantly.
C)  limiting competitive arrangements between firms and their suppliers.
D)  prohibiting price fixing.
E)  prohibiting collusion.F) B) and E)
G) All of the above

Question 8

Regarding the provision of a public utility like water,

Accepted Answer

A)  many small firms can deliver the water to households most efficiently.
B)  a state-owned firm can deliver the water to households most efficiently.
C)  two firms can deliver the water to households most efficiently.
D)  a few large firms can deliver the water to households most efficiently.
E)  one firm can deliver the water to households most efficiently.F) C) and D)
G) B) and C)

Question 9

Economists who complain about airline deregulation say that

Accepted Answer

A)  there is too much competition in large regional airline hubs.
B)  fares have increased on all major routes in the country.
C)  it has reduced competition between St.Louis and Kansas City.
D)  rural areas no longer receive the service they previously received.
E)  the increased number of planes in the sky is unsafe.F) A) and D)
G) All of the above

Question 10

The government agency that is partially responsible for competition policy in the United States is the

Accepted Answer

A)  Department of Commerce.
B)  Treasury Department.
C)  Congressional Budget Office.
D)  Antitrust Division of the Justice Department.
E)  Federal Reserve System.F) B) and D)
G) A) and B)

Question 11

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

Accepted Answer

A)  Making marginal cost equal to marginal revenue pricing
B)  Setting prices for a period and then allowing the firm to keep any profits made over that period
C)  Average variable cost pricing
D)  Threatening to shut down the firm
E)  Fixed cost pricingF) A) and B)
G) A) and C)

Question 12

A regulatory authority might require a monopoly to use marginal cost pricing because marginal cost pricing

Accepted Answer

A)  lowers but does not eliminate deadweight loss to society.
B)  does not change deadweight loss to society.
C)  eliminates any deadweight loss to society.
D)  minimizes the total cost of a natural monopoly.
E)  increases deadweight loss to society.F) A) and D)
G) A) and E)

Exam 12: Antitrust Policy and Regulation

A merger of firms with low price-cost margins is less likely to be challenged by the Federal Trade Commission.

Correct Answer
verified

Economists who complain about airline deregulation say that

Correct Answer
verified

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Correct Answer
verified

Marginal cost pricing is a regulatory method that stipulates that the firm charge a price equal to

Correct Answer
verified

When a firm uses average total cost pricing,

Correct Answer
verified

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

Correct Answer
verified

When a firm uses average total cost pricing, the price is

Correct Answer
verified

Regulation of a natural monopoly could give an economy the advantages of

Correct Answer
verified

The government agency that is partially responsible for competition policy in the United States is the

Correct Answer
verified

Regarding the provision of a public utility like water,

Correct Answer
verified

Antitrust policy includes all of the following except

Correct Answer
verified

A regulatory authority might require a monopoly to use marginal cost pricing because marginal cost pricing

Correct Answer
verified

Exam 12: Antitrust Policy and Regulation

A merger of firms with low price-cost margins is less likely to be challenged by the Federal Trade Commission.

Correct AnswerverifiedShow Answer

Economists who complain about airline deregulation say that

Correct AnswerverifiedShow Answer

If a group of firms in a particular category of goods all change their quantity sold by 1 percent and revenues change significantly, then the firms constitute a market.

Correct AnswerverifiedShow Answer

Marginal cost pricing is a regulatory method that stipulates that the firm charge a price equal to

Correct AnswerverifiedShow Answer

When a firm uses average total cost pricing,

Correct AnswerverifiedShow Answer

Which of the following is one method by which the government can regulate the price charged by a natural monopoly?

Correct AnswerverifiedShow Answer

When a firm uses average total cost pricing, the price is

Correct AnswerverifiedShow Answer

Regulation of a natural monopoly could give an economy the advantages of

Correct AnswerverifiedShow Answer

The government agency that is partially responsible for competition policy in the United States is the

Correct AnswerverifiedShow Answer

Regarding the provision of a public utility like water,

Correct AnswerverifiedShow Answer

Antitrust policy includes all of the following except

Correct AnswerverifiedShow Answer

A regulatory authority might require a monopoly to use marginal cost pricing because marginal cost pricing

Correct AnswerverifiedShow Answer

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