1. When judging the anti competitive effects of a horizontal merger, the FTC and
ID: 1237124 • Letter: 1
Question
1. When judging the anti competitive effects of a horizontal merger, the FTC and Justice Department are likely to look most closely at the:A) combined concentration ratio of the merged firms.
B) size of the Herfindahl-Hirschman Index but not the change in the index.
C) change in the Herfindahl-Hirschman Index but not the size of the index.
D) size of the Herfindahl-Hirschman Index and the change in the index.
2. The marginal decision rule as applied to regulation states that regulations:
A) should be undertaken when their marginal benefits exceed their marginal costs.
B) should be undertaken when their marginal benefits are less than their marginal costs.
C) that improve safety should be undertaken, whatever the costs.
D) should be designed to minimize the net benefit.
3. If an industry merger severely lessens competition, the merger would be in violation of the:
A) Sherman Antitrust Act.
B) FTC Act.
C) Clayton Act.
D) Robinson-Patman Act.
Explanation / Answer
C) change in the Herfindahl-Hirschman Index but not the size of the index. A) should be undertaken when their marginal benefits exceed their marginal costs. A) Sherman Antitrust Act.
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