Review the Web article below: Government in the Economy A).Is there benefit for government involvement in the microeconomy? If so, what is it? If not, why not? (10 pts)...

Solutions:
Solutions:
1) FOUR BASIC ANTITRUST LAWS
1. The Sherman Act: The Sherman Act was passed in 1890.It is the original, principal, and foremost antitrust statute in the United States, considered as a “charter of the marketplace” and “constitution of competition law” in American jurisprudence. This act provides both civil remedies and criminal penalties for the principal antitrust violations including conspiracies to restrain trade, monopolization, attempted monopolization, and conspiracies to monopolize.
2. The Clayton Act: This act was passed in 1914. It imposes restrictions on proposed mergers and acquisitions. It also supplements the Sherman Act, prohibiting some kind of commercial practices that excessively stifle competition on the merits. It also sets forth various civil remedies. Furthermore, this Act usefully allows the courts to enjoin anti-competitive conduct before it actually causes harm.
3. The Robinson-Patman Act: This law was enacted in 1936 and prohibits specific business practices such as price-fixing and price-discrimination. . Its purpose is to protect smaller businesses by limiting the large company's ability to command discriminatory discounts through its purchasing power. It serves as a supplement to both the above stated Acts.
4. The Federal Trade Commission Act: This act established the Federal Trade Commission (“FTC”), which has regulatory authority to enforce all acts. Section 5 of this Act prohibits "unfair methods of competition." and "deceptive practices." It also confers additional authority on the FTC to test the limits of antitrust policy. A firm that has no civil remedies under the Sherman Act or Clayton Act might decide that its best recourse is to complain to the FTC, asking it to investigate the matter and initiate administrative.
2) Yes, antitrust laws are effective to a certain extent in promoting and protecting competition and to help the marketplace economics to work better. But at the same time antitrust laws fo
id any improper monopoly or any attempt to obtain a monopoly by improper means. It also fo
id dominant firms to act in collusion in order to impose unfair commercial practices that tend to subvert “competition on the merits” in any market that they dominate or aim to dominate by means of the improper practice. These laws also outlaw specific kinds of recognized commercial fraud that by their very nature are calculated to destroy competition in the market in which they are employed.
Hence at the end, these laws serve merely to punish, restrain and burden the most successful competitors of every market, thereby causing enormous injury to competition. These laws instead are meant to redress or temper the fundamental flaw that seems inherent to un
idled competition.
3) The short-run farm problem is the fluctuations in farm prices and incomes due to:
(1) An inelastic demand for agricultural products
(2) Fluctuations in farm output
(3) Shifts of the demand curve for farm products
The long-run farm problem is the declining agricultural industry due to
(1) The increased supply of farm products because of technological progress.
(2) The demand for farm products has increased slowly, because it is inelastic with respect to income
(3) Immobile resources
4) Government intervenes in the agriculture market to stabilize the conditions in farming and to increase the real farm incomes. Accordingly, many programs have been devised by government to affect the demand and supply of agricultural products, and the prices received by the farmers. Earlier, price support was used as a policy instrument to restrict supply but later on target prices and deficiency payments (subsidies) became more important policy instruments. Other forms of Government intervention are as follows:
· Command and Control: Government can direct all aspects of their countries' agricultural production via the force of law in order to ensure production, favoring certain crops which are deemed to be desirable over others, or to ensure that a certain percentage of the country's population is dedicated towards agricultural labor.
· Subsidies: Governments of the countries with large agricultural bases and high standards of living sometimes engage in providing publicly-funded agricultural subsidies to farmers. Under this system, the government pays selected agricultural producers to keep their crop yields below a certain threshold to guarantee higher food prices and benefit the agricultural...