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Student Quizzes
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1
When one company can supply the entire market for a product at a lower cost than any of the smaller firms, this company is experiencing:
A)externalities.
B)resource regulation.
C)destructive competition.
D)natural monopoly.
2
When a large company dominates an industry in such a way that it can cut prices to force competitors to shut down their business, it is an example of:
A)destructive competition.
B)natural monopoly.
C)externalities.
D)monopsony.
3
When a factory dumps toxic waste into a river and the community has to pay to clean up this mess, it is an example of:
A)natural monopoly.
B)externalities.
C)destructive competition.
D)environmental dumping.
4
All of the following are market flaws that justify regulation EXCEPT:
A)externalities.
B)destructive competition.
C)inadequate information.
D)natural monospony.
5
Which of the following objectives of regulation would include the production of safe goods?
A)Regulation to benefit special interests.
B)Resolution of national and global problems.
C)Socially desirable goods and services.
D)Socially desirable production methods.
6
The Equal Employment Opportunity Commission enforces rules prohibiting sexual harassment and workplace discrimination. This is an example of:
A)regulation to benefit special interests.
B)regulation to protect civil rights at work.
C)regulation of natural resources.
D)regulation to ensure production of safe products.
7
In the U.S., the fundamental authority for federal regulation of business is:
A)the U.S. Constitution.
B)the Bill of Rights.
C)the President of the United States.
D)the United States Senate.
8
The part of the U.S. Constitution that gives the federal government the right to regulate business is called:
A)the contract clause.
B)the general welfare clause.
C)the commerce clause.
D)the regulatory process.
9
All of the following statements about the independent regulatory commission are true EXCEPT:
A)it was a regulatory agency run by a small group of commissioners independent of political control.
B)it was run by five commissioners who serve staggered six-year terms.
C)the commissioners were nominated by the President and confirmed by the Senate.
D)no more than two of the five commissioners were to be of any one political party.
10
Which of the following statements about the executive agency is false?
A)It is an agency within the executive branch run by a single administrator.
B)The administrator is nominated by the President and confirmed by the Senate.
C)The agency heads can be removed by the Senate for no particular cause or reason.
D)The agencies are more exposed to political winds than independent commissions.
11
Any attempt by the government to control the behavior of citizens, corporations, or groups is called:
A)orientation.
B)regulation.
C)rule.
D)code of conduct.
12
Which of the following has complete authority to set U.S. interest rates?
A)The Federal Trade Commission
B)The EPA
C)The Federal Reserve Board
D)The U.S. Congress
13
Which of the following statements about rule-making is false?
A)A rule is a decree developed by an agency to implement a law passed by Congress.
B)Rules are created in a complex, formal rule-making process.
C)The rule-making process is designed to protect the public from arbitrary acts of government.
D)The basic steps of the rule-making process were set forth in the Regulatory Flexibility Act.
14
Decisions made by regulatory agencies that are intended to implement laws passed by the U.S. Congress are called:
A)rules.
B)guidelines.
C)hypernorms.
D)regulations.
15
When the draft of a proposed rule is finished, it must be published in:
A)the Congressional Record.
B)the Commerce Business Daily.
C)the Federal Register.
D)the Code of Federal Regulations.
16
Which of the following statements about the "Federal Register" is false?
A)It is a government publication containing notice of actions by federal regulatory agencies.
B)It was started during the New Deal years.
C)It is published every working day.
D)It codifies final regulations.
17
Guidance is:
A)intended to clarify government regulations.
B)legally binding.
C)issued only by the Congress.
D)incapable of changing existing rules.
18
Which of the following statements about the Chevron doctrine is false?
A)It is the general rule that federal courts should defer to agency rules that are based on reasonable interpretations of ambiguous statutes.
B)It was created in 1984 by the Supreme Court.
C)The agency's interpretation should be held "reasonable" under all circumstances.
D)This doctrine was created in the Chevron v. National Resources Defense Council case.
19
One basic finding made by the World Bank in its 2004 study is:
A)poor countries regulate business the most.
B)poor countries regulate business in a consistent manner.
C)developing countries engage in continuous regulatory reform.
D)poor countries regulate less on all aspects of business activity.
20
The World Bank study of 2004 set forth all of the following principles of good regulation EXCEPT:
A)focusing on enhancing property rights.
B)increasing court involvement in business matters.
C)expanding the use of technology.
D)simplifying in competitive markets.





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