Market Failure Review

Laws that promote competition and give the government the power to break up monopolies are called ______ laws.

• consumer protection

• anti-monopoly

• antitrust

• trustbusting

Which of the following is NOT one of the main federal antitrust laws?

• Sherman Antitrust Act

• Securities and Exchange Commission Act

• Clayton Antitrust Act

• Federal Trade Commission Act

In the United States, there are federal laws that prohibit unfair trade practices. Which federal agency doesn't enforce these laws?

• Department of Justice

• Securities and Exchange Commission

• Federal Trade Commission

At the turn of the 20th century, _________'s company, Standard Oil, controlled 91% of oil production and 85% of final sales in the United States. An antitrust case was filed against Standard Oil in 1906 by the Roosevelt Administration under the Sherman Antitrust Act.

• J.P. Morgan

• John D. Rockefeller

• Cornelius Vanderbilt

• Andrew Carnegie

In the mid-1990s the five major recorded music distributors began enforcing a “minimum advertised price” for compact discs sold in the United States. As a result, CD prices remained artificially high. The FTC estimated that consumers paid about $480 million more for CDs than they would have if prices had been established by market forces. In 2000, the FTC reached an agreement with the distributors to end this anticompetitive practice called ________.

• oligopoly

• price-fixing

• price wars

• monopolistic competition.

This federal agency protects consumers from unsafe foods, drugs, and cosmetics.

• FDA

• USDA

• FCC

• SEC

This federal agency regulates television, telephones, radio, and the internet.

• SEC

• EPA

• FTC

• FCC

This federal agency regulates the stock markets, bond markets, and the companies in those markets in order to protect investors.

• FCC

• SEC

• FTC

• EPA

This federal agency sets safety standards for consumer products and issues recalls for unsafe products.

• CPSC

• CFPB

• FCC

• FTC

______ is the federal agency that protects consumers in matters relating to the financial sector (like credit card companies and banks). It was created in the aftermath of the Great Recession.

• CPSC

• CFPB

• FCC

• EPA