The Justice Department is most likely to oppose a proposed merger on the basis of the Herf

The Justice Department is most likely to oppose a proposed merger on the basis of the Herf

The Justice Department is most likely to oppose a proposed merger on the basis of the Herfindahl-Hirschman Index when the post-merger HHI is:

A) less than 100.

B) less than 1000.

C) between 1000 and 1800.

D) greater than 1800.

42) Which of the following values of the Lerner Index indicates the greatest amount of market power?

A) 0.313.

B) 0.375.

C) 0.6.

D) 0.625.

43) Which of the following measures is used by the Justice Department to evaluate the competitive effects of proposed mergers?

A) The Lerner Index.

B) The eight-firm concentration ratio for an industry.

C) The four-firm concentration ratio for an industry.

D) The Herfindahl-Hirschman Index.

44) The Sherman Antitrust Act:

A) prohibits conspiracies in restraint of trade.

B) allows the formation of trusts so long as they are public enterprises.

C) allows a group of firms to form a trust only if it is done to take advantage of economies of scale.

D) prevents the military from using armored vehicles on the public streets.

45) The Clayton Act:

A) was passed in 1985 over the objections of then President Reagan.

B) outlaws racial discrimination in the practice of business.

C) outlaws the ownership of stock by the U.S. government unless it is in public enterprises.

D) outlaws price discrimination unless based on cost differences.

46) The federal law that prohibits, among other things, conspiracies in restraint of trade, monopolization, or combinations or conspiracies to monopolize is the:

A) Sherman Act of 1890.

B) Clayton Act of 1914.

C) Federal Trade Commission Act of 1914.

D) Celler-Kefauver Act of 1950.

47) The federal law that prohibits, among other things, price discrimination that lessens competition, the use of tie-in sales, and mergers between firms that reduce competition is the:

A) Sherman Act of 1890.

B) Clayton Act of 1914.

C) Federal Trade Commission Act of 1914.

D) Celler-Kefauver Act of 1950.

48) The federal law that prohibits, among other things, "unfair" competition and created the Federal Trade Commission is the:

A) Sherman Act of 1890.

B) Clayton Act of 1914.

C) Federal Trade Commission Act of 1914.

D) Celler-Kefauver Act of 1950.

49) Assume the managers of the two major firms in an industry agree to set the price of their output at a fixed level so as to discourage new entrants into the market. This would be considered a violation of the:

A) Sherman Act of 1890.

B) Clayton Act of 1914.

C) Federal Trade Commission Act of 1914.

D) Celler-Kefauver Act of 1950.

50) Which of the following would be least likely to lead the Justice Department and the FTC to block a proposed horizontal merger?

A) A finding that the resulting firm might be able to unilaterally affect price and output.

B) A finding that the potential for entry into the market by new firms would be adversely affected.

C) A finding that the potential for coordination among sellers in the market would be enhanced.

D) A finding that resulting cost savings and efficiencies would offset any increase in market power.