With greater time it is said that elasticity of demand ______
increases
100
What type of merger would it be if Bic Pen Corporation merged with Warehouser Paper Co.
Conglomerate
100
What is a Monopoly? ie: it is an action
restricting output and increasing prices
100
What was the first Anti-Trust legislation written by the US Government
Sherman Anti-Trust Act
200
What does the Law of Supply show businesses should expect as prices rise?
Quantity Supplied to increase
200
Elasticity of Demand demonstrates how sensitive we are to a change in a products _______
Price
200
If Bandaid Corp wanted to produce a new product with antiseptic on the bandaid and bought out a division of Phiser Corp., who produced anti-septic.
Vertical
200
Which classification of business has multiple owners and is said to have equal liability
Partnership
200
What was the first successful usage of the Sherman Act?
Standard Oil Corporation
300
Suppose that over spring break American Airlines offers FREE airfare to College Students. What effect will this have on Demand for Airfare for college students?
Nothing. It will increase the QD but not the demand. PRICE NEVER EFFECTS DEMAND DIRECTLY!
300
Rate in order of lest to most elastic:
red apples, apples grown in Arkansas, apples, Fuji apples
Apples, red apples, apples grown in Arkansas, Fuji apples
300
if Mcdonalds Corp. buys out Burger King
Horizontal
300
Profits are a function of _____________
uncertainty
300
What was the first usage of the Sherman Act?
Labor Unions
400
Suppose that we observe that the OVERALL price of Health Insurance rates have increased by 35% and that the overall quantity demanded has increased by 50%. (This is the estimated reaction due to the new health care law) Can this happen in the market, prove or disprove it graphically
Yes it can happen. Demand increases drastically due to the government forcing everyone to have insurance.
400
An elastic product is said to have an elasticity greater than ____
1
400
What are the two ratio's that we are worried about for the CR?
>60 & <40
400
Which business classification is a result of many large companies acting as one.
Cartel
400
This Anti-Trust Act is defined as very long and full of definitions.
Clayton Act
500
A hurricane is headed to Houston Texas. To prevent Gouging the local government institutes price controls on Gasoline to ensure that gas stations are not taking advantage of distraught consumers. What will be the immediate market effect graphically, and what will happen to the overall supply of gasoline available to consumers in this market?
This is a binding price ceiling that will cause mass shortages of gasoline in the market during the control.
500
Explain the theory of a Unit Elastic product
the Elasticity = 1, or no matter the price the QD will never change. Vertical Demand curve
500
Who regulates mergers of two or more companies
FTC (Federal Trade Commission)
500
The HHI takes in to account the market ratio versus the top ____ companies
50
500
The Anti-Trust case against Standard Oil Corp. is the most notable case of its kind in US history. What was the verdict of the Supreme Court in the case, and economically speaking was it a just ruling by the justices? Explain.
The Supreme Court ruled that Standard Oil Was a Monopoly. In economic terms it was not a just ruling. Standard Oil was increasing output and prices were falling, so be definition the were not acting in a Monopolistic manner