1. If competition decreases in a certain industry

a. it would not matter because competition has very little affect in a market economy.

b. A company that is in that industry may have and exert more economic power.

c. Resources will be allocated more efficiently

d. Prices will most likely be lower in that industry

2. The Sherman Anti-Trust Act

a. Gave monopolies a legal right to exist and grow

b. Gave all unions money to pay their members

c. Was a governmental attempt to promote and encourage competition.

d. Created new policies to ensure that workers’ compensation was given to all workers

3. One reason the government is involved in the U.S. economy is to

a. regulate industries in which a monopoly is in the public interest

b. encourage monopolies

c. discourage competition

d. promote the development of negative externalities

4. Under perfect competition

a. The buyers are usually uninformed

b. Market equilibrium sets the price of goods and services

c. The government determines how much of a good to produce.

d. The seller tends to spend much effort in advertising its product because of product differentiation.

5. The Clayton-Anti Trust Act

a. Was never passed

b. Helped monopolists grow wealthier

c. Was passed to lower the taxes on the wealthiest Americans

d. Outlawed price discrimination.