Chapter 8 Daily Double Stern BUS 404 Spring 2016

The government intervenes to thwart anticompetitive behaviors throughout the marketplace.

A natural monopoly exists where a single large firm, such as a utility, is more efficient than several small ones.

When all the costs and benefits of a good or service are fully internalized or absorbed by producers or consumers, those costs or benefits fall elsewhere as externalities.

Negative externalities are those in which a decision maker does not receive the full benefit of a decision.

The Supremacy Clause of the US Constitution broadly specifies the power accorded to the federal government to regulate business activity

Optimal efficiency often demands one uniform federal rule rather than a patchwork of 50 state rules.

The US Constitution does not expressly forbid state regulation of interstate commerce.

Police power refers to the right of the state governments to promote the public health, safety, morals, and general welfare.

Purely intrastate activities can be regulated by the federal government if they have a substantial effect on interstate commerce.

The Commerce Clause, as interpreted by the judiciary, affords private companies exclusive discretion over foreign commerce.

In the event of an irreconcilable conflict between federal and state law, the Supremacy Clause provides that federal law will preempt state or local law rendering it unconstitutional.

States cannot regulate insurance as this is solely a federal responsibility.

Local government intervention in business typically involves various licensure requirements.

Administrative law principles are generally applicable to the conduct of state and local governments.

Agency commissioners are appointed typically for a life term

Administrative agencies act as pseudo governments, performing purely executive, legislative, and judicial roles.

Adjudication ordinarily involves standards to be applied to the future conduct of a class of unspecified parties.

Congress controls agency budgets and thus can encourage or discourage particular agency action

Federal agency rules and orders cannot be challenged in court

Which of the following would most likely be considered a negative externality for a manufacturing firm?

A. Internal disagreements among the firm's employees
B. Unfavorable public opinion about the firm's products
C. Air and water pollution as a result of the firm's manufacturing processes
D. Government regulations detrimental to the firm's manufacturing activities

When all the costs and benefits of a good or service are not fully internalized or absorbed, those costs or benefits fall elsewhere as what economists have labeled ____.

A. public goods
B. neighborhood effects
C. commoditization
D. imperfect information

Today, attention in the monopoly area is largely directed to:

A. preventing negative externalities
B. curbing anticompetitive conduct
C. controlling the formation of cartels
D. regulating open competition

Which of the following statements is true of public goods?

A. The added cost of benefiting one person is zero or nearly so.
B. There are methods for excluding those who choose not to pay for public goods
C. They will be produced in adequate quantities in the absence of gov't regulations
D. They can be provided to consumers through a pricing system

Which of the following acts forbids the use, cultivation, or possession of marijuana for any purpose?

A. The Harrison Narcotics Tax Act
B. The Controlled Substances Act
C. The Food, Drug, and Cosmetic Act
D. The Pure Food and Drug Act

Which of the following ended Prohibition in 1933 and gave the states broad authority to regulate the sale of alcohol?

A. The 21st Amendment
B. The Commerce Clause
C. The Fifth Amendment
D. The Supremacy Clause

Which of the following is an example of the federal government exceeding its authority in regulating commerce?

A. Regulating railroad routes and rates
B. Prohibiting indecent materials on regular broadcast television between 6 am and 10 pm
C. Forcing most Americans to maintain "minimum essential" health insurance
D. Specifying standards of safety and health in industry

Which of the following statements is true of licensure?

A. It is lauded for having benefits that exceed its costs in increased prices.
B. It is issued to increase services and decrease administrative expenses
C. It is criticized as being designed to block the entry of competitors
D. It is used by the fed gov't to intervene in business

Which of the following was the 1st fed regulatory agency that Congress est. in 1887 for the purpose of regulating railroad rates and routes?

A. The Federal Trade Commission
B. The Interstate Commerce Commission
C. The Environmental Protection Agency
D. The Food and Drug Administration

Which of the following statements is true of independent federal agencies?

A. They are usually the departments of the gov't's exec. branch
B. They are created via statutes labeled enabling legislation
C. They are not vested with substantial legislation so as to prevent autonomy
D. They are created to delegate a portion of their authority to Congress

Identify the correct statement about a federal agency.

A. An independent federal agency is usually located within the departments of the govt's executive branch
B. In a rule-making situation, a fed agency avoids using the hybrid process.
C. In creating a fed agency, Congress delegates a portion of its authority to that body
D. A federal agency doesn't have substantial authority to regulate a specified segment of American life

Which of the following served as the basis for the creation of a fourth branch of gov't by Congress?

A. Agency commissioners are appointed in staggered terms, typically of three years' duration
B. Agencies must delegate a portion of their authority to Congress as they recognize that they are not the appropriate bodies to address the specific elements of certain problems
C. The appointment of agency commissioners is done by the Senate with the advice of the president.
D. The appointment of agency commissioners for most of the independent agencies must reflect an approximate political balance between the two major parties

The primary purpose of most of the early agencies was to address

A. economic concerns
B. discrimination issues
C. environmental concerns
D. product safety issues

Which of the following statements is true of federal agencies?

A. Federal agencies typically appoint commissioners for a life term.
B. Federal agencies avoid using the hybrid rule-making process.
C. The president has direct authority over the executive federal agencies.
D. The independent federal agencies are usually located within the departments of the executive branch of the government.

The ___ was enacted to provide a framework for agency rule-making and to detail broad standards for judicial review of agency decisions

A. Public Records Act
B. Political Reform Act
C. Administrative Procedure Act
D. Uniform Adoption Act

Which of the following is an example of the federal regulatory authority of control of information

A. Preventing the entry of certain products into the market
B. Directing that warning labels be stuck on products
C. Uniform pricing of cable TC services
D. Banning of a flame retardant used in children's nightwear

CartMed Inc., an over-the-counter (OTC) drug manufacturer, is directed by the Office of National Drug Control Policy (ONDCP) to refrain from manufacturing cough syrups that exceed 22 percent alcohol content for children below the age of ten. This authority of the ONDCP falls under which of the following federal regulatory categories?

A. Control of information
B. Control of rates
C. Control of standards
D. Control of cost

Identify the type of rules that offer an administrative agency's view of the meaning of those statutes for which the agency has administrative responsibility.

A. Interpretive rules
B. Legislative rules
C. Procedural rules
D. Substantive rules

Which of the following statements is true of executive functions of federal agencies?

A. They always offer formal advice in response to requests.
B. They are empowered to resolve tax disputes
C. They don't deal with the compliance with laws and regulations
D. They hear workers' compensation claims but can't resolve them

Which of the following is an example of an executive function performed by a fed agency?

A. Leasing fed lands
B. Enacting procedural rules
C. Regulating internal revenue service
D. Publishing all fed rules and orders daily

Which of the following statements relates to procedural rules?

A. They define rights and duties, such as crimes and punishments, and vivil rights and responsibilities
B. They impose new duties on affected parties and have the effect of law
C. They delineate a fed agency's internal operating structure and methods
D. They offer a fed agency's view of the meaning of those statutes for which the agency has administrative responsibility.

Federal Trade Commission rules providing for a cooling-off period of three business days within which the buyer may cancel door-to-door sales contracts are an example of an agency's application of its __ rules.

A. procedural
B. interpretive
C. legislative
D. substantive

Internal Revenue Service regulations are an example of ___ rules.

A. substantive
B. interpretative
C. legislative
D. provedural

Which of the following is true of rule-making by agencies?

A. The agencies create rules that resemble laws but don't have the force of laws.
B. The federal gov't provides an online portal where the public can comment on proposed rules
C. Legislative rules delineate the agency's internal operating structure and methods
D. Procedural rules are policy expressions having the effect of law

Which of the following statements is true of judicial review of agency rules?

A. Review of controversial, high visibility rules issued by agencies is not common.
B. Courts take a broad approach to judicial review of such cases.
C. Courts cannot overrule the agencies' interpretation of a rule
D. Judges readily sustain the judgment of the agency where reasonable

Which of the following statements is true of the Federal Communications Commission's (FCC) indecency rules?

A. FCC rules increase the prices of cable TV services that broadcast indecent material.
B. FCC rules forbid indecent material on conventional broadcast services when children are likely to be in the audience.
C. FCC rules forbid indecent material on cable networks between 6 pm and 10 am.
D. FCC rules apply to subscription services such as programming delivered via satellite

A(n) ___ is an economics argument claiming that an individual or business that is protected from risk will increase its risk-taking behavior in the future in the belief that a bailout will follow, if needed.

A. unjust enrichment
B. unconscionable contract
C. wrongful discharge
D. moral hazard

Since the late 1970s, the US has been in a period of deregulation during which:

A. federal agencies were newly created to undertake legislative functions of the government.
B. administrative agencies acted as governments, performing purely executive, legislative, and judicial roles.
C. federal powers were separated from the powers of the states.
D. great efforts were made to reduce the role of government in big portions of American life. Telecommunications were substantially returned to market forces.