1. According to William Shepherd, in the U.S. economy A) Herfindahl indexes have

Question

1. According to William Shepherd, in the U.S. economy

A) Herfindahl indexes have been increasing, indicating a decrease in competitiveness

b) Herfindahl indexes have been decreasing, indicating a decrease in competitiveness

c) the market share of the largest manufacturing firms has increased, indicating a decrease in competitiveness

d) competition has decreased because of exports, regulation, and insuffcient antitrust activity

2) Techonological change is decreasing competition in the market for media.

True

False

3) The Sherman Act

a) Prohibited restraint of trade

b) created the Federal Trade Commision

c) prohibited fraudulent advertising

d) regulated the railroads

e) exempted incsurance companies from antitrust law

4) Government controls of price, output, entry of new firms, and quality of service in industries where monopoly appears desirable are known as

a) antitrust regulation

b) economic regulation

c) socail regulation

d) antimerger regulation

e) consumer advocacy regulation

5) The herfindahl index is the sum of the squared market shares of the four largest firms in an industry.

True

False

6) Under current guidelines, the U.S. Department of Justice usually challenges

a) all mergers

b) mergers in industries that would havea poster merger Herfindahl index greater than 1,800

c) mergers in industries that would have a postmerger Herfindahl index greater than 1,800 if the Herfindahl index increases by more than 100 points

d)mergers in industries that would have a postmerger Herfindahl index greater than 1,000

e) mergers in industries that would have a postmerger Herfindahl index greater than 1,000 if the Herfindahl index increases by more than 100 points

7) Natural monopolies are firms that

a) have a downward-sloping long-run average cost curve over the entire range of market demand

b) have an upward-sloping long-run average cost curve over the entire range of market demand

c) are protected against the entry of new firms by patents, licenses, or other legal restrictions

d)

control a nonreproducible resource that is critical to production

e) have been created over time by the mergers of many smaller firms.

control a nonreproducible resource that is critical to production

e) have been created over time by the mergers of many smaller firms.

Explanation / Answer

1-b

2-true

3-a

4-c

5-b

6-a

7-d

7-

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