Peter studies at the coffee shop around the corner, at the same time that John talks loudly on his cell phone. The costs and benefits of each cell phone call made by John are given by the following table: 
If the both Peter and John could negotiate a settlement without transactions costs, how many phone calls would John end up making if Peter had the rights to stop any cell phone calls from taking place at the coffee shop?
A. 3
B. 1
C. 0
D. 2
Answer: D
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Which of the following would fall under the "rule of reason doctrine?"
a. General Motors colludes with Ford to fix the price of their cars b. Coke and Pepsi collude to limit the quantity of soft drinks on the market c. Intel dominates the market for computer processors with a 95% market share d. Reynolds American, Inc. and Lorillard, Inc. agree to limit the introduction of new cigarette brands e. two local restaurants agree to increase their prices by 10%
Economists would describe cartels as
a. the opposite of ignoring interdependence. b. a collusive arrangement. c. an undesirable form of market organization that may charge a monopoly price. d. All of the above are correct.
Goods that are not excludable are usually
a. higher priced than excludable goods. b. higher priced than rival goods. c. in short supply. d. free of charge.
Producers' political power and strong stake in the regulatory outcome lead them, in effect, to control the regulating agency and prevail on it to serve producer interests is called the:
a. capture theory of regulation b. tying contract c. exclusive dealing d. interlocking directorate