7. Which of the following is true of the per se rule? a. The per se rule was use

Question

7. Which of the following is true of the per se rule? a. The per se rule was used by U.S. courts from 1914 until the 1920s. b. The per se rule had the effect of making antitrust policy more liberal. c. According to the per se rule, activities that were potentially monopolizing tactics d. The per se rule did not allow the mere existence of anticompetitive activities to be sufficient evidence for a guilty verdict. c. The per se rule was revived by Bush administration. 8. Which of the following statements is true of price fixing? a. It represents a high level of competition in an industry b. It is allowed only under the provisions of the Federal Trade Commission Act c. It is, by definition, illegal, as there is no justification for it. d. It occurs only in monopolistically competitive industries. e. It is legal in United States. Which of the following statements best describes the difference between economic regulation and social regulation? a. Economic regulation has little to do with price and output while social regulation 9. explicitly deals with price and output. Social regulation is concerned with directly redistributing wealth while economic regulation is concerned with accumulation of wealth. Economic regulation is concerned with directly redistributing wealth while social regulation is concerned with accumulation of wealth. Social regulation has historically targeted industries such as railroads and airlines while economic regulation has all the industries under its purview. Economic regulation deals with price and output, while social regulation deals with health and safety matters that apply across several industries. b. c. d. e. 0. When regulators require that a natural monopoly sets price equal to average total cost a. it is said to be allowing a fair rate of return. b. the firm earns a super normal profit. c. the firm shuts down permanently d. the firm operates at the profit-maximizing level of output. e. the firm shuts down temporarily A market failure occurs when: a. the market outcome is viewed as unfair by a majority of consumers. b. a market fails to provide the good at a zero price. c. quantity demanded exceeds quantity supplied d. the market outcome is not the socially efficient outcome. e. prices are determined by the interaction of the forces of demand and supply and not 11. through central planning.

Explanation / Answer

a) "C"

According to the per se rule, activities that were monopolizing tactics were illegal.

b) "C"

Price fixing is illegal and there is no justification for it.

c) "E"

Economic regulation deals with the price and output, while social regulation deals with the health and safety regulations that apply across the industry.

d) "A"

It is said to be allowing a fair rate of return.

e) "C"

When there is a mismatch between the demand and supply it is the market failure.

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