Chapter 12_2: Regulation and the Antitrust Law

Chapter 12_2: Regulation and the Antitrust Law; Time: 40 phút

Question 1: When no interest group wishes to spend more on influencing economic regulation and no politician offers different regulations,
a. regulations will no longer be supplied.
b. regulations will no longer be demanded.
c. the economic regulation makes all groups better off.
d. everyone is not necessarily in agreement about the economic regulation.

Question 2: Regulation refers to
a. rules administered by a government agency.
b. the formation of monopolies.
c. the discipline of the marketplace.
d. cartelization of a competitive industry.

Question 3: Antitrust laws attempt to
a. establish minimum wages.
b. enforce fair trade laws.
c. prevent monopolies or collusion.
d. support prices.

Question 4: In part, an antitrust law
a. requires firms with profits to pay dividends.
b. provides for strict product liability.
c. prohibits monopolistic practices.
d. prohibits charging prices that customers think are too high.

Question 5: The main purpose of antitrust law is to
a. prohibit monopoly practices such as restricting output.
b. regulate the stock and bond markets.
c. encourage the formation of cartels.
d. regulate advertising.

Question 6: The main factors influencing the demand for regulation include all of the following EXCEPT the
a. number of buyers in the market.
b. producer surplus per firm.
c. number of government officials involved.
d. number of firms in the industry.

Question 7: For a given consumer surplus per buyer resulting from regulation, the demand for price regulation
a. increases more than proportionately to the number of buyers.
b. increases less than proportionately to the number of buyers.
c. decreases as the number of buyers increases.
d. increases proportionately to the number of buyers.

Question 8: The demand for regulation by buyers varies directly with the consumer
a. surplus per buyer created by the regulation and the number of buyers.
b. spending per buyer and the number of firms.
c. spending per buyer and the number of buyers.
d. surplus per buyer created by the regulation and the number of firms.

Question 9: The larger the consumer surplus gained per buyer from a regulation, the
a. more likely that the regulation will set the price at the competitive price.
b. greater is the demand for the regulation.
c. lower the price paid for the regulation.
d. lower the number of demanders for the regulation.

Question 10: Firms' demand for a particular regulation is tied directly to the
a. producer surplus per firm created by the regulation and the number of firms.
b. total revenue per firm and the number of buyers.
c. total revenue per firm and the number of firms.
d. producer surplus per firm created by the regulation and the number of buyers.

Question 11: Who supplies economic regulation?
a. competitive firms
b. politicians
c. monopolists
d. labor unions and heavy industry

Question 12: Politicians' supply of regulation is smaller when the
a. regulation benefits a small number of people but by a large amount per person.
b. regulation benefits a large number of people but by a small amount per person.
c. number of people affected by the regulation is large and each person has a large benefit.
d. consumer surplus per buyer or producer surplus per firm generated is large.

Question 13: The supply of economic regulation will increase when
a. there is a decrease in the benefit per buyer created by the regulation.
b. there is an increase in the benefit per buyer created by the regulation.
c. there is a small benefit spread over a large number of people.
d. there is a decrease in the benefit per seller created by the regulation.

Question 14: The social interest theory of regulation predicts that the
a. producer surplus will be maximized, whereas capture theory predicts that consumer surplus will be maximized.
b. consumer surplus will be maximized, whereas the capture theory predicts that producer surplus will be maximized.
c. deadweight loss is eliminated, whereas the capture theory predicts that consumer surplus will be maximized.
d. deadweight loss is eliminated, whereas the capture theory predicts that producer surplus will be maximized.

Question 15: The goal of regulators is to reduce deadweight loss, according to the
a. public choice theory of regulation.
b. rationally ignorant median voter theory.
c. social interest theory of regulation.
d. capture theory of regulation.

Question 16: The social interest theory of regulation assumes that
a. regulations promote the attainment of monopoly profit.
b. regulations promote the attainment of efficiency.
c. public officials seek their own gain through regulation.
d. regulators will seek to maximize consumer surplus.

Question 17: The social interest theory of regulation assumes that
a. public officials seek gain through regulation for only their own constituents.
b. regulations set price equal to average total revenue.
c. regulations maximize consumer surplus.
d. public officials seek to minimize deadweight loss.

Question 18: The social interest theory of regulation predicts that the political process will seek to minimize
a. total surplus.
b. consumer surplus.
c. deadweight loss.
d. producer surplus.

Question 19: The social interest theory of regulation assumes that
a. regulations favor voters over producers.
b. public officials favor consumers over producers.
c. public officials seek to keep their jobs.
d. regulations promote the attainment of competitive output.

Question 20: The capture theory of regulation implies that regulations maximize
a. producer surplus.
b. consumer surplus.
c. external surplus.
d. total surplus.

Question 21: The capture theory of regulation implies that
a. the demand for regulation is less elastic than the supply.
b. regulations promote the attainment of efficiency.
c. public officials favor voters over producers.
d. regulations promote the attainment of economic profit.

Question 22: According to the capture theory, as long as regulations do not decrease votes, they will
a. be imposed only when the benefits are received by disinterested parties.
b. not be imposed unless external costs are generated.
c. not be imposed if external costs result.
d. be imposed if they increase the surplus of small, easily identified groups.

Question 23: According to the capture theory, regulation occurs because a
a. large group of winners from regulation gains only a small amount per person.
b. small group of losers from regulation loses a great deal per person.
c. small group of winners from regulation gains a great deal per person.
d. deadweight loss escapes market disciplines.

Question 24: In many states, dentists who are licensed in other states cannot practice in the first state without passing a rigorous state exam. The regulation benefits dentists who are already practicing in the state. This requirement best illustrates
a. the effect of the Sherman Act.
b. the capture theory of regulation.
c. the effect of the Clayton Act.
d. the social interest theory of regulation.

Question 25: In some states, barbers and beauticians cannot care for hair without passing an examination testing such specialized knowledge as the location of the sphenoid bone and how to do finger waves. The regulation benefits barbers and beauticians who are already licensed. This requirement best illustrates
a. the capture theory of regulation.
b. the effect of the Sherman Act.
c. the social interest theory of regulation.
d. the effect of the Clayton Act.

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