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| 1 | |
Answer the next question on the basis of the following table showing the market shares of 6 firms in four hypothetical industries, labeled W through Z. Assume these are distinct industries with no buyer-seller relationships or competition among them.
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Refer to the table. A merger between firm 1 in industry W and firm 2 in industry Y would be a(n): |
| | A) | vertical merger |
| | B) | horizontal merger |
| | C) | illegal merger |
| | D) | conglomerate merger |
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| 2 | |
Answer the next question on the basis of the following table showing the market shares of 6 firms in four hypothetical industries, labeled W through Z. Assume these are distinct industries with no buyer-seller relationships or competition among them.
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Refer to the table. As measured by the Herfindahl index, industry concentration is greatest in industry: |
| | A) | W |
| | B) | X |
| | C) | Y |
| | D) | Z |
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| 3 | |
Which of the following allows injured parties to collect triple damages from illegal monopolies? |
| | A) | Celler-Kefauver Act |
| | B) | Sherman Act |
| | C) | Wheeler-Lea Act |
| | D) | Clayton Act |
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| 4 | |
Jones is a director of ABC Company and sits on the board of its competitor, the XYZ Company, effectively reducing competition in the industry. This activity was outlawed by the: |
| | A) | Sherman Act |
| | B) | Federal Trade Commission Act |
| | C) | Clayton Act |
| | D) | Wagner Act |
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| 5 | |
A merger between Coca Cola and Pepsico would be an example of a: |
| | A) | vertical merger |
| | B) | horizontal merger |
| | C) | conglomerate merger |
| | D) | structural merger |
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| 6 | |
The market shares of the only firms in a particular industry are 40%, 40%, and 30%. The Herfindahl index for this industry is: |
| | A) | 33.3 |
| | B) | 100 |
| | C) | 1000 |
| | D) | 4100 |
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| 7 | |
Industries characterized as natural monopolies operate most efficiently with a single seller, yet a single seller is likely to engage in monopolistic practices. Government oversight in this situation is known as: |
| | A) | social regulation |
| | B) | bipartisan regulation |
| | C) | industrial regulation |
| | D) | legal cartel theory |
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| 8 | |
Studies of the U.S. deregulation of the airline, trucking, and rail freight industries have revealed that: |
| | A) | prices have dropped by one third to one half, adjusted for inflation |
| | B) | industry output has decreased, adjusted for population growth |
| | C) | these industries have "remonopolized" as firms have either merged or gone out of business |
| | D) | deregulation ultimately harms consumers |
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| 9 | |
Among other things, social regulation addresses: |
| | A) | pricing decisions by natural monopolies |
| | B) | mergers that lead to industry concentration |
| | C) | price discrimination |
| | D) | product design |
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| 10 | |
The initial court ruling in the Microsoft case, overturned on appeal, called for breaking the firm into two competing companies. |
| | A) | True |
| | B) | False |
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