What was the an effect of the Sherman Antitrust Act?
(A) John D. Rockefeller formed the Standard Oil Trust as a protected natural monopoly.
(B) The federal government won the power to prevent monopolies and mergers that interfered with trade between states.
(C) Microsoft required personal computer manufacturers to include its web browser with the Microsoft Windows operating system.
(D) The federal government repealed regulations that controlled the airline and trucking industries.
Ans: (B) The federal government won the power to prevent monopolies and mergers that interfered with trade between states.
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From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
A) Due to their differences in quality and performance, dealer bicycles are not close substitutes. B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. C) Dealers are small sellers and have little control over bicycle prices. D) A and B are correct. E) B and C are correct.
Transfer payments are:
A. spending that transfers resources from the government to individuals. B. payments that individuals make to the government. C. when individuals transfer stock ownership in lieu of payment with cash or other liquid assets. D. when individuals transfer cash for payments of a good or service.