Question 1

An economic market situation in which a single business has the power to fix the price of goods or services is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 2

George believes that antitrust policy should lead to more efficient markets. Based on George's view, which of the following statements is true?

Accepted Answer

A)  George subscribes to both the Chicago and the Harvard Schools of antitrust policy. 
B)  George subscribes to neither the Chicago School nor the Harvard School of antitrust policy. 
C)  George subscribes to the Chicago School, but not the Harvard School of antitrust policy. 
D)  George subscribes to the Harvard School, but not the Chicago School of antitrust policy. 
A)  George subscribes to both the Chicago and the Harvard Schools of antitrust policy. 
B)  George subscribes to neither the Chicago School nor the Harvard School of antitrust policy. 
C)  George subscribes to the Chicago School, but not the Harvard School of antitrust policy. 
D)  George subscribes to the Harvard School, but not the Chicago School of antitrust policy.

Question 3

mergers involve the acquisition by one firm of another that produces products or services that are not directly related to those of the acquiring firm.

Accepted Answer

A)  Conglomerate 
B)  Forward vertical 
C)  Backward vertical 
D)  Horizontal 
A)  Conglomerate 
B)  Forward vertical 
C)  Backward vertical 
D)  Horizontal

Question 4

Which of the following activities is judged by the per se standard?

Accepted Answer

A)  exchange of information 
B)  joint research and development ventures 
C)  group boycotts 
D)  vertical price and non-price restraints 
A)  exchange of information 
B)  joint research and development ventures 
C)  group boycotts 
D)  vertical price and non-price restraints

Question 5

Steinem's, a women's clothing line, decides to acquire a company that owns several retail outlets that sell its clothing. This is an example of a merger.

Accepted Answer

A)  backward horizontal 
B)  forward horizontal 
C)  backward vertical 
D)  forward vertical 
A)  backward horizontal 
B)  forward horizontal 
C)  backward vertical 
D)  forward vertical

Question 6

The Antitrust Enforcement Assistance Act of 1994 gave the U.S. Department of Justice authority to negotiate "mutual assistance" agreements with foreign antitrust enforcers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following terms refers to one company's acquisition of another company's assets or stock in such a way that the second company is absorbed by the first?

Accepted Answer

A)  diversification 
B)  penetration 
C)  merger 
D)  collusion 
A)  diversification 
B)  penetration 
C)  merger 
D)  collusion

Question 8

If cross-elasticity of demand is positive, an increase in price of the alleged monopolistic product will result in consumers' sticking to the same product.

Accepted Answer

A) True 
 B)False

Question 9

Mergers may take place for all but which of the following reasons?

Accepted Answer

A)  the philosophy that "bigness" is not "bad" 
B)  a desire to increase competition in the relevant market 
C)  tax credits for research and development 
D)  economies of scale 
A)  the philosophy that "bigness" is not "bad" 
B)  a desire to increase competition in the relevant market 
C)  tax credits for research and development 
D)  economies of scale

Question 10

Price differences in milk cartons that are slightly different in size falls under Section of the Clayton Act.

Accepted Answer

A)  2(f) 
B)  2(d) 
C)  2(b) 
D)  2(a) 
A)  2(f) 
B)  2(d) 
C)  2(b) 
D)  2(a)

Question 11

Discuss the various goals of the antitrust statutes.

Accepted Answer

A century of debate by lawyers, economis

Question 12

Which of the following is true of the act-of-state doctrine?

Accepted Answer

A)  State-regulated models discourage price-fixing and collaboration among competitors. 
B)  When the illegal conduct is that of a foreign government, the courts are permitted to examine and decide the merits of any claim alleged. 
C)  It forbids courts of the United States from evaluating the lawfulness of acts of foreign sovereigns performed within their own territories. 
D)  It forbids the merger of foreign companies that have significant sales in the United States. 
A)  State-regulated models discourage price-fixing and collaboration among competitors. 
B)  When the illegal conduct is that of a foreign government, the courts are permitted to examine and decide the merits of any claim alleged. 
C)  It forbids courts of the United States from evaluating the lawfulness of acts of foreign sovereigns performed within their own territories. 
D)  It forbids the merger of foreign companies that have significant sales in the United States.

Question 13

Which of the following terms refers to an action that interferes with the economic law of supply and demand?

Accepted Answer

A)  conscious parallelism 
B)  collusion 
C)  restraint of trade 
D)  conspiracy 
A)  conscious parallelism 
B)  collusion 
C)  restraint of trade 
D)  conspiracy

Question 14

Section of the Clayton Act prohibits an individual from becoming a director in two or more corporations if any of them has capital, surplus, and individual profits aggregating more than $21,327,000 or competitive sales of $2,132,000 when engaged in interstate commerce.

Accepted Answer

A)  2 
B)  8 
C)  3 
D)  7 
A)  2 
B)  8 
C)  3 
D)  7

Question 15

The purpose of Section of the Act is to prohibit anticompetitive mergers and acquisitions that tend to lessen competition at their incipiency.

Accepted Answer

A)  3; Clayton 
B)  7; Clayton 
C)  1; Sherman 
D)  3 Sherman 
A)  3; Clayton 
B)  7; Clayton 
C)  1; Sherman 
D)  3 Sherman

Question 16

Under the act-of-state doctrine, when illegal conduct is that of a , the courts are not permitted to examine and decide the merits of the claim alleged.

Accepted Answer

A)  foreign individual 
B)  foreign government 
C)  domestic individual 
D)  domestic corporation 
A)  foreign individual 
B)  foreign government 
C)  domestic individual 
D)  domestic corporation

Question 17

Compare and contrast the Chicago and Harvard Schools' approaches to antitrust policy.

Accepted Answer

The Chicago School approach to antitrust

Question 18

The School approach to antitrust policy argues that antitrust decisions should be based solely on the criterion of economic .

Accepted Answer

A)  New York; fairness 
B)  Chicago; fairness 
C)  New York; efficiency 
D)  Chicago; efficiency 
A)  New York; fairness 
B)  Chicago; fairness 
C)  New York; efficiency 
D)  Chicago; efficiency

Question 19

The Bank Merger Act of 1966 requires that all bank mergers be approved in advance by the banking agency having jurisdiction-that is, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), or the Comptroller of the Currency.

Accepted Answer

A) True 
 B)False

Question 20

The courts' major concern in cases involving vertical price-fixing has been whether the .

Accepted Answer

A)  fixed price was reasonable to consumers 
B)  fixed price was in line with prices charged by competitors retailing the same product 
C)  retailer made the pricing decision independently or by agreement with the manufacturer 
D)  manufacturer could remain financially viable at the agreed price 
A)  fixed price was reasonable to consumers 
B)  fixed price was in line with prices charged by competitors retailing the same product 
C)  retailer made the pricing decision independently or by agreement with the manufacturer 
D)  manufacturer could remain financially viable at the agreed price

Exam 24: Antitrust Laws

An economic market situation in which a single business has the power to fix the price of goods or services is called a monopoly.

George believes that antitrust policy should lead to more efficient markets. Based on George's view, which of the following statements is true?

mergers involve the acquisition by one firm of another that produces products or services that are not directly related to those of the acquiring firm.

Which of the following activities is judged by the per se standard?

Steinem's, a women's clothing line, decides to acquire a company that owns several retail outlets that sell its clothing. This is an example of a merger.

The Antitrust Enforcement Assistance Act of 1994 gave the U.S. Department of Justice authority to negotiate "mutual assistance" agreements with foreign antitrust enforcers.

Which of the following terms refers to one company's acquisition of another company's assets or stock in such a way that the second company is absorbed by the first?

If cross-elasticity of demand is positive, an increase in price of the alleged monopolistic product will result in consumers' sticking to the same product.

Mergers may take place for all but which of the following reasons?

Price differences in milk cartons that are slightly different in size falls under Section of the Clayton Act.

Discuss the various goals of the antitrust statutes.

Which of the following is true of the act-of-state doctrine?

Which of the following terms refers to an action that interferes with the economic law of supply and demand?

Section of the Clayton Act prohibits an individual from becoming a director in two or more corporations if any of them has capital, surplus, and individual profits aggregating more than $21,327,000 or competitive sales of $2,132,000 when engaged in interstate commerce.

The purpose of Section of the Act is to prohibit anticompetitive mergers and acquisitions that tend to lessen competition at their incipiency.

Under the act-of-state doctrine, when illegal conduct is that of a , the courts are not permitted to examine and decide the merits of the claim alleged.

Compare and contrast the Chicago and Harvard Schools' approaches to antitrust policy.

The School approach to antitrust policy argues that antitrust decisions should be based solely on the criterion of economic .

The Bank Merger Act of 1966 requires that all bank mergers be approved in advance by the banking agency having jurisdiction-that is, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), or the Comptroller of the Currency.

The courts' major concern in cases involving vertical price-fixing has been whether the .

Critical Thinking and Legal Reasoning

Introduction to Law and the Legal Environment of Business

The American Legal System

Alternative Tools of Dispute Resolution

Constitutional Principles

White-Collar Crime and the Business Community

Ethics, Social Responsibility, and the Business Manager

The International Legal Environment of Business

The Law of Contracts and Sales I

The Law of Contracts and Sales Ii

The Law of Torts

Product and Service Liability Law

Law of Property: Real and Personal

Intellectual Property

Agency Law

Law and Business Associations I

Law and Business Associations II

The Law of Administrative Agencies

The Employment Relationship and Immigration Laws

Laws Governing Labor-Management Relations

Employment Discrimination

Environmental Law

Rules Governing the Issuance and Trading of Securities

Laws of Debtor-Creditor Relations and Consumer Protection

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