1.An individual will prefer outsourcing a task to an agent if the latter has a higher opportunity cost of time.

True

False

2.The marginal benefit of acquiring additional information tends to:

be zero if the marginal cost of information is zero.

increase and then decrease as additional information is obtained.

be very high for goods whose price dispersion is very small.

be zero in the case of luxury goods.

decrease as additional information is obtained.

3.Governments often enact regulations that benefit producers because:

they seek to regulate in the best interest of the public.

consumers have less information than producers and therefore seek government protection.

consumers have a strong interest in matters that affect their standard of living.

producers lobby as they have a strong interest in matters that affect their specialized source of income.

producers seek to act in the best interest of the public.

4.Which act of Congress declared tying contracts, exclusive dealing, and price discrimination illegal?

The Wheeler-Kefauver Act

The Sherman Antitrust Act

The Clayton Act

The Wheeler-Lea Act

The Celler-Kefauver Anti-Merger Act

5.According to the current Justice Department guidelines, a merger in an industry is not likely to be challenged if the:

merger increases the Herfindahl-Hirschman Index to above 1,800.

industry has a pre-mergerHerfindahl-Hirschman Indexof below 1,500.

industry has a pre-mergerHerfindahl-Hirschman Indexof greater than 1,800.

industry has a pre-mergerHerfindahl-Hirschman Indexof less than 1,000.

industry has a pre-mergerHerfindahl-Hirschman Indexequal to 10,000.