3) A trust is A) an agreement among firms to charge the perfectly competitive price. B) a compact between industry and government. C) a creation of the Sherman Act. D) an arrangement between firms whereby decision making is controlled by a board of trustees. 4) Firms in a trust A) act as a single firm. B) act in their own self interests. C) trust each other. D) do not allow a small number of trustees to make decisions for participating firms. 5) An arrangement between firms whereby decision-making is controlled by a board of trustees is known as A) a trust. B) a compact between industry and government. C) predatory pricing. D) a merger. 6) Which of the following companies was NOT broken up by the government? A) Standard Oil B) AT&T C) American Tobacco D) Office Depot 7) Which of the following companies was broken up by the government? A) Standard Oil B) Office Depot C) Wonder Bread D) Southwest Airlines 8) Which of the following companies was broken up by the government? A) American Tobacco B) Office Depot C) Wonder Bread D) Southwest Airlines 9) In which of the following cases did the government break up a monopoly? A) Staples/Office Depot B) Interstate Bakeries and Continental Bakery C) Xidex D) AT&T 10) When two firms in an industry become one firm they are engaged in A) a trust agreement. B) a merger. C) predatory pricing. D) none of the above 11) The government is likely to block a merger if A) the firms remaining would all earn economic profit. B) it can be established that the merger would substantially reduce competition. C) the firms remaining would be able to charge a price above marginal cost. D) the firms that are merging are producing different products. 12) In the Staples/Office Depot Case the government A) blocked a merger. B) allowed a merger but regulated the resulting firm. C) allowed a merger and did not regulate the resulting firm. D) prosecuted the two firms for collusion.
