Answer the following statements true (T) or false (F)
1. If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on the "structuralist" perspective will increase.
2. A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company.
3. Strict enforcement of antitrust laws will generally complement the economic objective of encouraging new technologies that require large amounts of capital investment.
4. Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists is socially acceptable.
5. If the government regulates a natural monopoly and sets a "fair return" pricing policy, then the regulated firm will have greater incentive to improve its operating efficiency.
1. F
2. F
3. F
4. T
5. F
You might also like to view...
The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF0. At which of the following production points would the economy grow most rapidly?
A) Point A B) Point B C) Point C D) It makes no difference among the three points because they are all production efficient. E) More information is needed to answer the question.
When a government has a budget surplus, the surplus
A) helps finance investment. B) crowds-out private saving. C) must be subtracted from private saving to get total saving. D) increases the world real interest rate.
Moral hazard is
A) the tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party. B) when one of the parties to an agreement has an incentive after the agreement is made to act in a manner that brings additional benefits to himself or herself at the expense of the other party. C) a situation in which only bad quality items are bought and sold. D) an action taken outside a market that conveys information that can be used by that market.
The fraction of deposits banks are required to keep as reserves is called the:
A) deposit requirement. B) reserve requirement. C) excess reserve requirement. D) none of the above.