Question 1

What is the role of the OFT?

Accepted Answer

The conduct of the Office of Fair Tradin...

Question 2

Under which type of merger is cross- subsidisation most likely to occur?

Accepted Answer

A)   Conglomerate
B)   Vertical
C)   Horizontal
D)   Natural
E)   A collusive oligopolyF) A) and B)
G) A) and C)

Question 3

A conglomerate is likely to be the most damaging to competition.

Accepted Answer

A) True 
 B)False

Question 4

In each of the following possible circumstances, decide whether the effect will be to:
-The firms are not aggressive profit- maximisers.

Accepted Answer

A)   reduce the size of monopoly profits.
B)   prevent prices being considerably above the competitive level.
C)   both
D)   neitherE) All of the above
F) A) and D)

Question 5

In each of the following possible circumstances, decide whether the effect will be to:
-After a merger, firms engage in a process of rationalisation.

Accepted Answer

A)   reduce the size of monopoly profits.
B)   prevent prices being considerably above the competitive level.
C)   both
D)   neitherE) A) and B)
F) A) and C)

Question 6

Anti- monopoly legislation is undertaken to____ competition, and market regulation is undertaken to_______ competition.

Accepted Answer

A)   promote; promote
B)   restrict; promote
C)   promote; restrict
D)   restrict; restrictE) A) and C)
F) C) and D)

Question 7

Give three ways in which a merger could be in the public interest.

Accepted Answer

1) Rationalisation - lower cos...

Question 8

What is the main reason for the existence of competition policy?

Accepted Answer

Most firms do not operate under a condit...

Question 9

Which of the following does the EU consider to be anti- competitive practices?

Accepted Answer

A)   Limit production
B)   Price fixing
C)   Fixing market shares
D)   All of the aboveE) All of the above
F) A) and D)

Question 10

What are some of the measures in education and training policy that have been introduced to encourage lifelong learning and support business?

Accepted Answer

National Vocational Qualifications (NVQs...

Question 11

In each of the following possible circumstances, decide whether the effect will be to:
-The market is contestable. _

Accepted Answer

A)   reduce the size of monopoly profits.
B)   prevent prices being considerably above the competitive level.
C)   both
D)   neitherE) A) and B)
F) A) and C)

Question 12

A horizontal merger is a merger of firms producing complementary products.

Accepted Answer

A) True 
 B)False

Question 13

Match the anti- competitive practices to the definitions.
-Tie- in sales

Accepted Answer

A)   A firm is only prepared to supply certain selected retail outlets.  
B)   A vertically integrated firm controls the supply of an input and charges competitors a high price for that input so that they cannot compete with it in selling the finished good.
C)   Firms divide up the market between them, agreeing not to compete in each other's part of the market.
D)   Firms bidding for a contract e.g. to supply building materials for a new office development)  all agree beforehand to bid high prices.
E)   A firm sells the same good at a different price relative to costs)  in different sectors of the market. F)  A firm is only prepared to hire out equipment and not sell it outright.G)  A firm controlling the supply of one product insists that its customers also buy a second product from it rather than from its rivals.  H)  A firm sells a product below cost in order to drive competitors from the industry.I)  Firms get together to agree on a common price.  J) A) and I)
K) A) and B)

Question 14

The EU and UK approaches to restrictive practices are very similar. Article 101 of the Treaty of the Functioning of the European Union and Chapter 1 of the UK's 1998 Competition Act do not seek to ban all agreements between oligopolies, but rather to ban various types of anti- competitive behaviour by oligopolists.

Accepted Answer

A) True 
 B)False

Question 15

Under EU monopoly policy, which of the following are examples of the abuse of market power?
  (i)  Limiting production, markets or technical developments to the detriment of consumers
(ii)  Charging unfairly high prices to consumers
(iii)  Charging unfairly low prices to suppliers
(iv)  Using price discrimination or other discriminatory practices to the detriment of certain parties
(v)  Making other firms that sign contracts accept unfavourable obligations which, by their nature, have no connection with the subject of such contracts

Accepted Answer

A)   (i) , (ii)  and (v) 
B)   (i) , (ii) , (iii) , (iv)  and (v) 
C)   (i) , (iii)  and (iv) 
D)   (ii) , (iii)  and (iv) 
E)   (ii) , (iv)  and (v) F) B) and C)
G) B) and D)

Question 16

A merger in which firms at various stages in a production process combine is a

Accepted Answer

A)   production merger.
B)   vertical merger.
C)   conglomerate merger.
D)   diagonal merger.
E)   horizontal merger.F) A) and E)
G) B) and D)

Question 17

The existence of free- riders in research and development (R&D) will increase R&D expenditure as it lowers the costs of R&D.

Accepted Answer

A) True 
 B)False

Question 18

Article 101 of EU policy refers to the abuse of market power.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following are likely reasons for the proposed merger (writing in May 2013)  between the OFT and the Competition Commission?

Accepted Answer

A)   To reduce the duration of investigations, thereby cutting costs
B)   To benefit from economies of scale
C)   To reduce the duplication of processes
D)   To increase business confidence in regulation
E)   All of the above F)  A, B and DF) A) and E)
G) B) and C)

Question 20

The UK 2002 Enterprise Act made it a criminal offence for firms to agree with each other the price at which they would submit tenders for contracts.

Accepted Answer

A) True 
 B)False

Exam 21: Government and the Firm

Which of the following does the EU consider to be anti- competitive practices?

Correct Answer
verified

In each of the following possible circumstances, decide whether the effect will be to: -The market is contestable. _

Correct Answer
verified

A conglomerate is likely to be the most damaging to competition.

Correct Answer
verified

The UK 2002 Enterprise Act made it a criminal offence for firms to agree with each other the price at which they would submit tenders for contracts.

Correct Answer
verified

Match the anti- competitive practices to the definitions. -Tie- in sales

Correct Answer
verified

Anti- monopoly legislation is undertaken to competition, and market regulation is undertaken to___ competition.

Correct Answer
verified

In each of the following possible circumstances, decide whether the effect will be to: -The firms are not aggressive profit- maximisers.

Correct Answer
verified

A horizontal merger is a merger of firms producing complementary products.

Correct Answer
verified

Article 101 of EU policy refers to the abuse of market power.

Correct Answer
verified

A merger in which firms at various stages in a production process combine is a

Correct Answer
verified

What is the role of the OFT?

Correct Answer
verified
The conduct of the Office of Fair Tradin...
View Answer

Which of the following are likely reasons for the proposed merger (writing in May 2013) between the OFT and the Competition Commission?

Correct Answer
verified

Under which type of merger is cross- subsidisation most likely to occur?

Correct Answer
verified

Correct Answer
verified

What are some of the measures in education and training policy that have been introduced to encourage lifelong learning and support business?

Correct Answer
verified
National Vocational Qualifications (NVQs...
View Answer

The existence of free- riders in research and development (R&D) will increase R&D expenditure as it lowers the costs of R&D.

Correct Answer
verified

In each of the following possible circumstances, decide whether the effect will be to: -After a merger, firms engage in a process of rationalisation.

Correct Answer
verified

Correct Answer
verified

Give three ways in which a merger could be in the public interest.

Correct Answer
verified
1) Rationalisation - lower cos...
View Answer

What is the main reason for the existence of competition policy?

Correct Answer
verified
Most firms do not operate under a condit...
View Answer

Exam 21: Government and the Firm

Which of the following does the EU consider to be anti- competitive practices?

Correct AnswerverifiedShow Answer

In each of the following possible circumstances, decide whether the effect will be to: -The market is contestable. _

Correct AnswerverifiedShow Answer

A conglomerate is likely to be the most damaging to competition.

Correct AnswerverifiedShow Answer

The UK 2002 Enterprise Act made it a criminal offence for firms to agree with each other the price at which they would submit tenders for contracts.

Correct AnswerverifiedShow Answer

Match the anti- competitive practices to the definitions. -Tie- in sales

Correct AnswerverifiedShow Answer

Anti- monopoly legislation is undertaken to____ competition, and market regulation is undertaken to_______ competition.

Correct AnswerverifiedShow Answer

In each of the following possible circumstances, decide whether the effect will be to: -The firms are not aggressive profit- maximisers.

Correct AnswerverifiedShow Answer

A horizontal merger is a merger of firms producing complementary products.

Correct AnswerverifiedShow Answer

Article 101 of EU policy refers to the abuse of market power.

Correct AnswerverifiedShow Answer

A merger in which firms at various stages in a production process combine is a

Correct AnswerverifiedShow Answer

What is the role of the OFT?

Correct AnswerverifiedThe conduct of the Office of Fair Tradin...View AnswerShow Answer

Which of the following are likely reasons for the proposed merger (writing in May 2013) between the OFT and the Competition Commission?

Correct AnswerverifiedShow Answer

Under which type of merger is cross- subsidisation most likely to occur?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What are some of the measures in education and training policy that have been introduced to encourage lifelong learning and support business?

Correct AnswerverifiedNational Vocational Qualifications (NVQs...View AnswerShow Answer

The existence of free- riders in research and development (R&D) will increase R&D expenditure as it lowers the costs of R&D.

Correct AnswerverifiedShow Answer

In each of the following possible circumstances, decide whether the effect will be to: -After a merger, firms engage in a process of rationalisation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Give three ways in which a merger could be in the public interest.

Correct Answerverified1) Rationalisation - lower cos...View AnswerShow Answer

What is the main reason for the existence of competition policy?

Correct AnswerverifiedMost firms do not operate under a condit...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Anti- monopoly legislation is undertaken to competition, and market regulation is undertaken to___ competition.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The conduct of the Office of Fair Tradin...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
National Vocational Qualifications (NVQs...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1) Rationalisation - lower cos...
View Answer

Correct Answer
verified
Most firms do not operate under a condit...
View Answer