Problem 1. In what way do licensing, patents, import taxes, and import quotas restrict competition?
Problem 2. Why is it likely that in a system of private education (i.e., a system in which individuals pay for their own education) there will be underinvestment in education?
Problem 3. Determine if the justice department would challenge a merger between two firms in an industry with 10 equal-sized firms, based on its 1984 Herfindahl-index guidelines only.
Problem 4. Explain:
(a) in what way the U.S trucking industry exemplified the capture theory hypothesis of government regulation prior to the passage of the Motor Carrier Act of 1980 and
(b) the result of the passage of the Motor Carrier Act in 1980.
Problem 5. Explain:
(a) Why do most firms produce more than one product?
(b) What is the rule for profit maximization for a multiproduct firm?
(c) Why would a firm produce a product on which it makes zero profits?