When Markets Fail to Allocate Resources Efficiently, the Ultimate Source

question 19

Multiple Choice

When markets fail to allocate resources efficiently, the ultimate source of the problem is usually

• A) government regulation.
• B) that prices are not low enough so firms overproduce.
• C) that prices are not high enough so people over consume.
• D) that property rights have not been well established.

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Definitions:

Interlocking Directorates

Interlocking directorates occur when members of a company's board of directors also serve on the boards of other companies, which may lead to conflicts of interest or reduced competition.

Clayton Act

A U.S. law, enacted in 1914, aimed at increasing economic competition and preventing anticompetitive practices in their incipiency.

Federal Trade Commission Act

A landmark piece of legislation passed in 1914 aimed at promoting competition and protecting consumers from anticompetitive practices.

Celler-Kefauver Act

A United States antitrust law passed in 1950 aimed at preventing anti-competitive mergers and acquisitions by closing loopholes in the earlier Sherman Act.