Question 1

Which of the following is not a major criticism of social regulation?

Accepted Answer

Social regulation is often criticized for being anticompetitive, increasing product prices, and imposing a larger burden on small firms. However, increasing the rate of innovation in the economy is generally not considered a criticism of social regulation; in fact, in some cases, regulation can spur innovation by creating new market demands and standards that firms strive to meet.

Question 2

What have been the major outcomes from deregulation of industry? Give three examples of changes in particular industries.

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Question 3

A 2000 ruling by a Federal court found that Microsoft, with its very popular Windows operating system,

Accepted Answer

Microsoft was found to have used anticompetitive practices to maintain and broaden its monopoly power.

Question 4

In 2013, Apple was convicted, along with five publishers, including Harper Collins, Penguin, and Macmillan, of which antitrust violation?

Accepted Answer

Apple and the publishers were found guilty of conspiring to raise, fix, and stabilize the retail price for e-books, which is a clear case of price-fixing.

Question 5

What is a natural monopoly? List the two possible alternatives for promoting better economic outcomes where natural monopoly exists.

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Question 6

In 2018, tuna companies StarKist and Bumble Bee were charged with which antitrust violation?

Accepted Answer

StarKist and Bumble Bee were charged with price-fixing, which involves an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, not competing on price to the detriment of consumers.

Question 7

How effective have antitrust laws been in breaking up existing monopolies?

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Question 8

Why has one presidential administration enforced the antitrust laws more or less strictly than another?

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Question 9

Briefly describe the historical background that gave rise to antitrust laws and regulation in the United States.

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Question 10

Using the Internet, some firms are now employing software that uses pricing algorithms to constantly adjust their online prices in response to what rivals are charging for similar products. This is making it easier for the

Accepted Answer

Tacit collusion becomes easier with the use of pricing algorithms by allowing firms to quickly adjust their prices in response to competitors, without direct communication or explicit agreements.

Question 11

Why are horizontal mergers more likely to be opposed than vertical and conglomerate mergers?

Accepted Answer

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Question 12

How do economists view the overall effectiveness of antitrust policy?

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Question 13

Describe the three types of mergers and give real-world examples.

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Question 14

Describe the Wheeler-Lea Act of 1938 and name the company and the amount of that company's fine for their 2016 violation of this act.

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Question 15

How did the Clayton Act of 1914 strengthen and clarify the intent of the Sherman Act of 1890?

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Question 16

What was the importance of the Federal Trade Commission Act of 1914?

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Question 17

Describe the importance and major features of the Sherman Act of 1890.

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Question 18

How is price fixing among firms treated under antitrust policy?

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Question 19

What are tying contracts? How are tying contracts treated by antitrust enforcers?

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Question 20

How is price discrimination treated under antitrust laws?

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Quiz 21: Antitrust Policy and Regulation