Multiple Choice Answers

1.A conglomerate takes place when:
A. a firm acquires a competitor
B. similar firms agree to compete
C. a firm integrates its production backward toward its source of supply or forward in its marketing chain.
D. a firm buys another firm unrelated to the original firms business

2.You can find the MRP by multiplying marginal physical product by price for:
A. both the perfect competitor and the imperfect competitor
B. neither the perfect competitor nor the imperfect competitor.
C. only the perfect competitor
D. only the imperfect competitor

3.The additional output that one additional input of labor is responsible for is its_____product.
A. marginal revenue
B. marginal physical
C. average revenue
D. average physical

4.The firms demand schedule for a resource is its________schedule.
C. total revenue
D. output

5. As output rises:
A. both marginal revenue product and marginal physical product rise.
B. both marginal revenue product and marginal physical product fall
C. marginal revenue product rises and marginal physical product falls.
D. marginal revenue product rises and marginal physical product rises.

6.If the price that a perfect competitor received for his or her final product doubled, the firms MRP schedule would:
A. rise
B. fall
C. double at each price
D. stay about the same.

7.As output rises, the MRP of an imperfect competitor will_______ that of a perfect competitor.
A. rise faster than
B. fall faster than
C. rise at the same rate as
D. fall at the same rate as

8.The Standard Oil trust:
A. was broken up in 1946.
B. was controlled by several foreign nations.
C. forced its rivals out of business

9.The Clayton Act prohibited:
A.interlocking directorates.
B. all forms of monopoly.
C. foreign control of U.S. corporations.
D. false and deceptive advertising.

10.The convetional merger is the _____merger.
A. horizontal
B. vertical
C. conglomerate
D. diversifying

11.Each of the following is an advantage of forming a conglomerate Except: advantages
B.forming a big company
D.accumulation of power within two or three closely related industries.

12.A key passage of the ____Act stated that “every contract, combination in form of trust or otherwise, in restraint of commerce among the several states, or with foreign nations, in hereby declared illegal.”

13.The Microsoft case ended with a/an:
A.clear-cut win for the federal government.
B.compromise settlement between Microsoft and the federal government.
C.guilty plea by Microsoft, but no breakup of the company.
D.abandonment of the case by the federal government.

14.In the 1960’s, about 80 percent of the mergers were of the variety.

15.Each of the following industries was deregulated during the last 30 years EXCEPT:
A.the airlines
C.banking and TV.

18.The Sherman Act of 1890:
A.exempted labor unions from antitrust prosecution.
B.included stringent enforcement provisions.
C.outlawed unfair business practices to exclude rivals from selling in markets.
D.outlawed all monopolies

19.A conglomerate merger involves combining firms:
A.involved in the same industry
B.that are based in different contries.
C.from unrelated industries.
D.that control various stages of the production of a particular good from raw materials to finished manufacture.

20.Which statement is true?
A.Microsoft is subject to American antitrust laws, but not those of Europe, Asia, or elsewhere.
B.Microsoft has never been involved in an antitrust suit.
C.The European Commission fined Microsoft over $600 billion for its anticompetitive behavior.
D. Microsoft has always gone out of its way to be helpful to its competitors.