1)Federal antitrust laws in the U.S. serve to a)promote competition by prohibiti
ID: 1139629 • Letter: 1
Question
1)Federal antitrust laws in the U.S. serve to
a)promote competition by prohibiting monopolies.
b)make large corporations richer.
c)create new monopolies.
d)create only government-owned monopolies.
3)The market clearing price for gasoline is $1.50, but the maximum price that can be charged is $1.29. This is an example of
a)a price control that will lead to a surplus of gasoline on the market.
b)a price floor that will lead to a shortage of gasoline on the market.
c)a price ceiling that will lead to a shortage of gasoline on the market.
d)a price floor that will lead to a surplus of gasoline on the market.
6)The rationing function of prices refers to
a)the situation when government must intervene in a market when there is a large shortage or surplus.
b)the synchronization of decisions by buyers and sellers that leads to an equilibrium.
c)the synchronization of decisions by buyers and sellers through the direction of government agencies.
d)the situation when only the rich get the goods they want.
10)Who benefits primarily from rent controls?
a)Construction workers
b)Poor people looking for low-income housing
c)All who want to rent
d)Only renters who are able to get units at below-market rates
a)promote competition by prohibiting monopolies.
b)make large corporations richer.
c)create new monopolies.
d)create only government-owned monopolies.
Explanation / Answer
1) (a) Anti trust laws serve the purpose of preventing monoploy formation in the market or the concentration of market power with very few firms. Federal antitrust laws in the U.S. serve to promote competition by prohibiting monopolies.
2) (c) When the maximum price set is less than the equilibrium then it creates a shortage in the market where at the set price demand is more than supply. The market clearing price for gasoline is $1.50, but the maximum price that can be charged is $1.29. This is an example of a price ceiling that will lead to a shortage of gasoline on the market.
3) (d) Rationing function of prices is that prices decide the consumer to whom the good goes.The rationing function of prices refers to the situation when only the rich get the goods they want.
4) (d) Who benefits primarily from rent controls- Only renters who are able to get units at below-market rates
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