ECON 180 - Regulation and Antitrust Policy
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Course page:
www.cbpa.drake.edu/econ/boal/180
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I. Multiple choice [3 pt each: 33 pts total]
(1)b. (2)c. (3)c. (4)b. (5)b. (6)c. (7)a. (8)a. (9)c. (10)b. (11)b.
II. Problems
(1) [Intro to antitrust: 6 pts] Antitrust policy is enforced by two U.S. federal agencies: the Antitrust Division of the Justice Department, and the Federal Trade Commission.
(2) [Demand and supply, simultaneous equations: 22 pts]
(3) [Equilibrium: 8 pts]
(4) [Price elasticity of demand: 8 pts]
(5) [Price elasticity of demand: 10 pts]
(6) [Price elasticity of supply: 8 pts]
III. Critical thinking [5 pts]
This argument does not make sense. If many hotels are being built, then supply of hotel rooms will shift right. This will lower, not raise, the equilibrium price of hotel rooms. Consumers will benefit, not suffer, from lower prices. (Full credit requires graph showing supply shift and consequent decrease in price.)
I. Multiple choice [3 pt each: 33 pts total]
(1)d. (2)b. (3)b. (4)a. (5)a. (6)d. (7)a. (8)e. (9)b. (10)a. (11)a.
II. Problems
(1) [Intro to antitrust: 6 pts] Antitrust policy is enforced by two U.S. federal agencies: the Antitrust Division of the Justice Department, and the Federal Trade Commission.
(2) [Demand and supply, simultaneous equations: 22 pts]
(3) [Equilibrium: 8 pts]
(4) [Price elasticity of demand: 8 pts]
(5) [Price elasticity of demand: 10 pts]
(6) [Price elasticity of supply: 8 pts]
III. Critical thinking [5 pts]
(Same as Version A.)
[end of answer key]