MGMT 350 Chap 8

T/F: States cannot regulate the insurance industry as it is solely a federal responsibility.

With regard to the federal regulatory process, free-market activists want to do which of the following?

A. Allow the government to prevent and correct market failure
B. Permit the government to intervene in matters such as education and energy policy
C. Reduce government's ability to prevent and correct market failure
D. Increase deregulation by sharply reducing government

T/F: When all the costs and benefits of a good or service are not fully internalized or absorbed by producers or consumers, those costs or benefits fall elsewhere as externalities.

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 cases challenging agency rules.
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 would most likely be considered a positive externality?

A. The benefits that remain within the business
B. Favorable public opinion about the firm's products
C. Benefits from a business's decision that spill over to third parties
D. A pro-business regulation that decreases the requirements on the private sector

T/F: Local government intervention in business may only involve taxes.

The excessive regulation argument posits that government rules do all but which of the following?

A. Encourage innovation
B. Impose high compliance costs
C. Curb freedom
D. Limit business efficiency

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 TV services
D. Establishing minimum standards that the private sector must meet

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

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

Judicial review of agency decisions turn on technical issues of law such as:

A. Did Congress cede too much of its authority to the agency?
B. Were the agency's findings of fact supported by substantial evidence from the record as a whole?
C. Did the president exercise too much control over the independent agency's internal affairs?
D. Do the courts have the power to overrule an agency's interpretive rules?

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

Control of _____ is one of the three broad categories of federal regulatory authority.

A. Entry
B. Regulations
C. Externalities
D. Conduct

State governments have rule-making authority over public utilities (gas, electricity, sewage disposal) in all of the following areas except

A. customer service.
B. setting rates for that utility.
C. entry into the market.
D. annual shareholder meetings.

T/F: Adhering to free market principles, the government is reluctant to thwart anticompetitive behaviors in the marketplace.

T/F: Federal agency rules and orders cannot be challenged in court.

Public goods include which of the following?

A. Those goods that can be provided to all consumers through a free market unencumbered by anticompetitive behavior.
B. Those goods that can be excluded from people who choose not to pay for them.
C. Those goods that can be produced in adequate quantities to benefit the general welfare of the public.
D. Those goods for which the added cost of benefiting one person is zero or nearly so.

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.

Which of the following rules offer an administrative agency's view of the meaning of those statutes for which the agency has administrative responsibility?

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

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

A. The Fifth Amendment
B. The Eighteenth Amendment
C. The Twenty-First Amendment
D. The Fourteenth Amendment

Which of the following statements is true of federal agencies?

A. The executive federal agencies are empowered by enabling legislation.
B. The president has direct authority over the executive federal agencies.
C. Federal agencies derive their power through procedural rules established by Congress.
D. All federal agencies are created to regulate specified segments of American life.