Regulation and Antitrust Policy (Econ 180)
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Course page:
www.drake.edu/cbpa/econ/boal/180
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I. Multiple choice [3 pts each: 15 pts total]
(1)c. (2)b. (3)a. (4)a. (5)c.
II. Problems
(1) [Effects of regulation on cost: 14 pts]
(2) [Effect of regulation on quality: 14 pts]
(3) [Maximum prices and exit restrictions: 15 pts]
(4) [Measuring effects of regulation: 9 pts]
(5) [Railroad deregulation: 6 pts]
(6) [Trucking deregulation: 6 pts]
(7) [Airline deregulation: 6 pts]
III. Challenge question [5 pts]
If fast-food restaurants were required to charge a minimum price of at least $10 for a meal, then restaurants could no longer compete on price. So they would compete on quality, and fast-food quality would improve. However, consumers would be worse off, because the minimum price is equivalent to banning a product: low-quality fast-food. This is an example of excessive nonprice competition. (See problem (2) in this quiz.)
I. Multiple choice [3 pts each: 15 pts total]
(1)d. (2)c. (3)a. (4)b. (5)a.
II. Problems
(1) [Effects of regulation on cost: 14 pts]
(2) [Effect of regulation on quality: 14 pts]
(3) [Maximum prices and exit restrictions: 15 pts]
(4) [Measuring effects of regulation: 9 pts]
(5) [Railroad deregulation: 6 pts]
(6) [Trucking deregulation: 6 pts]
(7) [Airline deregulation: 6 pts]
III. Challenge question [5 pts]
Same as Version A.
[end of answer key]