ECON WK7 HW 7

The antitrust laws are enforced by the:

Federal Justice Department and the Federal Trade Commission.

In which of the following cases did the final court decision result in a breakup of the firm into competing businesses?

Standard Oil Case

According to public choice theorists, the private sector is more efficient than the public sector mainly because:

the private sector has a clear test of performance: profit and loss.

A merger between an automobile manufacturer and a maker of automobile tires is an example of a:

vertical merger

In the Microsoft antitrust case, the Federal government said in essence that:

Microsoft was a "bad monopoly."

The antitrust laws are based on the:

idea that competition leads to greater economic efficiency than does monopoly.

Which of the following is correct?

The Federal tax system is progressive, while the state and local tax system is regressive.

Which of the following best reflects the ability-to-pay philosophy of taxation?

a progressive income tax

Suppose Slow Ketchup requires that, as a condition of purchase, all restaurants using its product must buy and make available its new sales product. This arrangement is an example of:

a tying contract

The median-voter model implies that a political office seeker will:

adopt more extreme views when seeking his or her party's nomination than when running against the other party's opponent.

Which of the following taxes reflects the benefits-received principle of taxation?

gasoline taxes

A function of the Federal Trade Commission is to:

investigate instances of faulty and misleading advertising.

Price fixing:

is a per se violation of the antitrust laws.

A special-interest issue is one whose passage yields:

large economic gains to a small number of people and small economic losses to a large number of people.

Senator A agrees to vote for Senator K's state project in exchange for Senator K voting for Senator A's state project. This is an example of:

log rolling

The Sherman Act was designed to:

make monopoly and acts that restrain trade illegal.

The rule of reason indicated that:

only contracts and combinations that unreasonably restrain trade violate the antitrust laws.

The Clayton Act of 1914:

outlawed price discrimination, tying contracts, intercorporate stockholding, and interlocking directorates that lessen competition.

A situation in which society may not be able to rank its preferences consistently through majority voting refers to:

paradox of voting

Suppose that Kate and Kyle perceive $500 of marginal benefit from a proposed new recreation center, whereas Keith perceives $100. If the tax levied on each for the center is $400, a majority vote will:

pass this project and resources will be overallocated to it.

The sales tax is a regressive tax because the:

percentage of income paid as taxes falls as income rises.

Because majority voting fails to incorporate the strength of the preferences of individual voters, it:

produces economically inefficient outcomes under some circumstances.

The field of economics that analyzes government decision making, politics, and elections is called:

public choice theory

Economists call the pursuit of a transfer of wealth through government at someone else's expense:

rent-seeking behavior

In the Alcoa case of 1945 the courts held that:

the mere possession of monopoly power is a violation of the antitrust laws.