1. What is the difference between collusion and competition?

Group of answer choices

• Collusion is when firms follow the price changes and product changes of the dominant firm in an oligopolistic market. Competition is when firms operate independently.
• Collusion is when firms act together in ways to reduce output, keep prices high, and divide up markets. Competition is when firms operate independently.
• Competition is when firms operate independently. Collusion is when firms in the oligopoly market structure try to invite new entrants into the market to make it more competitive.
• Competition firms follow the price changes and product changes of the dominant firm in an oligopolistic market. Collusion is when firms operate independently.

2. Antitrust laws...

Group of answer choices

• Were implemented by the federal government to outlaw trusts.
• Make it more difficult to achieve pure competition.
• Often result in people going to jail when broken.
• Give the government the power to block certain mergers or break up large firms.

3. How would you calculate a four-firm concentration ratio?

Group of answer choices

• By calculating the square root of the market shares of the four largest firms.
• By dividing the market share of the largest firm by the market share of the smallest firm.
• By multiplying the market shares of four random firms.
• By adding the market shares (expressed as percentages) of the four largest firms.

4. How would you calculate the HHI for an industry?

Group of answer choices

• By multiplying industry sales by .77.
• By gathering data on total sales of the firms in the industry and dividing the sum by 7.
• By summing the market shares for each firm in the industry and multiplying by .2.
• By summing the squares of the market share of each firm in the industry.

5. What is the most controversial aspect of Antitrust regulation?

Group of answer choices

• Agreeing on which concentration measurement to use.
• Defining a market
• Sending violators to jail.
• Defining the allowable size the merged firm should be.

6. Restrictive practices are characterized as...

Group of answer choices

• Practices the reduce competition without outright agreements to raise price or reduce quantity
• Practices that prevent firms from entering certain markets.
• Practices that restrict the number of consumers who may purchase a product
• Practices that promote competition by restricting monopolies

7. The Microsoft antitrust case covered in your textbook embodies many of the gray areas in restrictive practices. Antitrust regulators accused Microsoft of numerous offenses. What was the end result?

Group of answer choices

• The federal government regulators finally dropped their case because the case was too complex to prove.
• Microsoft appealed a federal court decision to break up the company and reached a settlement with the government that it would end its restrictive practices.
• Microsoft won and its practices were not classified as restrictive.
• The federal government won its case, and Microsoft was broken into several smaller companies.