Question 1

Interlocking directorates are illegal under the Clayton Act whether or not the effect is to lessen competition substantially.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company?

Accepted Answer

A)  A horizontal merger. 
B)  A vertical merger. 
C)  A conglomerate merger. 
D)  A monopoly merger. 
A)  A horizontal merger. 
B)  A vertical merger. 
C)  A conglomerate merger. 
D)  A monopoly merger.

Question 3

Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?

Accepted Answer

A)  Clayton Act. 
B)  Robinson-Patman Act. 
C)  Celler-Kefauver Act. 
D)  Sherman Antitrust Act. 
A)  Clayton Act. 
B)  Robinson-Patman Act. 
C)  Celler-Kefauver Act. 
D)  Sherman Antitrust Act.

Question 4

Under fair-return pricing, a regulated natural monopoly will earn zero economic profit.

Accepted Answer

A) True 
 B)False

Question 5

It is against the law in the United States for one person to hold positions on more than one board of directors at a time.

Accepted Answer

A) True 
 B)False

Question 6

Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:

Accepted Answer

A)  positive economic profits. 
B)  zero economic profits. 
C)  negative economic profits. 
D)  monopoly profits. 
A)  positive economic profits. 
B)  zero economic profits. 
C)  negative economic profits. 
D)  monopoly profits.

Question 7

Which of the following is illegal under the Sherman Antitrust Act?

Accepted Answer

A)  Attempts to monopolize. 
B)  Price fixing. 
C)  Formation of cartels. 
D)  All of these are illegal under the Sherman Antitrust Act. 
A)  Attempts to monopolize. 
B)  Price fixing. 
C)  Formation of cartels. 
D)  All of these are illegal under the Sherman Antitrust Act.

Question 8

The Celler-Kefauver Act of 1950 plugged a technical loophole in the Clayton Act which permitted many large horizontal mergers.

Accepted Answer

A) True 
 B)False

Question 9

The rule of reason refers to the interpretation of the courts that dominant firms should be broken up because of their:

Accepted Answer

A)  market share dominance. 
B)  illegal business practices. 
C)  monopolistic behavior. 
D)  All of these. 
A)  market share dominance. 
B)  illegal business practices. 
C)  monopolistic behavior. 
D)  All of these.

Question 10

Which of the following practices is prohibited by the Clayton Act?

Accepted Answer

A)  Price discrimination that substantially lessens competition. 
B)  Tying contracts that substantially lessen competition. 
C)  Exclusive dealing that substantially lessens competition. 
D)  All of these. 
A)  Price discrimination that substantially lessens competition. 
B)  Tying contracts that substantially lessen competition. 
C)  Exclusive dealing that substantially lessens competition. 
D)  All of these.

Question 11

The per se rule was introduced in the:

Accepted Answer

A)  Standard Oil case. 
B)  U.S. Steel case. 
C)  American Tobacco Trust case. 
D)  Alcoa case. 
A)  Standard Oil case. 
B)  U.S. Steel case. 
C)  American Tobacco Trust case. 
D)  Alcoa case.

Question 12

A merger between McDonald's and Burger King would be called a:

Accepted Answer

A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  cartel. 
E)  game theory. 
A)  horizontal merger. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  cartel. 
E)  game theory.

Question 13

According to critics, the Utah Pie case represents a failure by the Supreme Court to distinguish between injury to competition that benefits consumers and injury to a specific competitor.

Accepted Answer

A) True 
 B)False

Question 14

A merger between two manufacturers of computers would result in which of the following?

Accepted Answer

A)  A vertical merger. 
B)  A conglomerate merger. 
C)  A horizontal merger. 
D)  A monopoly merger. 
A)  A vertical merger. 
B)  A conglomerate merger. 
C)  A horizontal merger. 
D)  A monopoly merger.

Question 15

For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:

Accepted Answer

A)  price discrimination. 
B)  a tying contract. 
C)  an interlocking directorate. 
D)  exclusive dealing. 
A)  price discrimination. 
B)  a tying contract. 
C)  an interlocking directorate. 
D)  exclusive dealing.

Question 16

The primary purpose of antitrust legislation is to:

Accepted Answer

A)  protect small business. 
B)  protect the competitiveness of U.S. business. 
C)  protect the prices of American-made products. 
D)  ensure American labor is paid a fair wage. 
E)  ensure firms earn only a fair profit. 
A)  protect small business. 
B)  protect the competitiveness of U.S. business. 
C)  protect the prices of American-made products. 
D)  ensure American labor is paid a fair wage. 
E)  ensure firms earn only a fair profit.

Question 17

Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?

Accepted Answer

A)  Price discrimination. 
B)  Tying contract. 
C)  Horizontal mergers by stock acquisition. 
D)  Interlocking directorates. 
A)  Price discrimination. 
B)  Tying contract. 
C)  Horizontal mergers by stock acquisition. 
D)  Interlocking directorates.

Question 18

The purchase of Michelin Tire Company by General Motors is an example of a vertical merger.

Accepted Answer

A) True 
 B)False

Question 19

Exhibit 13-1 Cable television monopolist  
-As shown in Exhibit 13-1, if the cable television monopolist is allowed to maximize profits, it will operate at point:

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 20

Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of:

Accepted Answer

A)  price discrimination. 
B)  exclusive dealing. 
C)  a tying contract. 
D)  interlocking directorates. 
A)  price discrimination. 
B)  exclusive dealing. 
C)  a tying contract. 
D)  interlocking directorates.

Interlocking directorates are illegal under the Clayton Act whether or not the effect is to lessen competition substantially.

Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company?

Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?

Under fair-return pricing, a regulated natural monopoly will earn zero economic profit.

It is against the law in the United States for one person to hold positions on more than one board of directors at a time.

Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:

Which of the following is illegal under the Sherman Antitrust Act?

The Celler-Kefauver Act of 1950 plugged a technical loophole in the Clayton Act which permitted many large horizontal mergers.

The rule of reason refers to the interpretation of the courts that dominant firms should be broken up because of their:

Which of the following practices is prohibited by the Clayton Act?

The per se rule was introduced in the:

A merger between McDonald's and Burger King would be called a:

According to critics, the Utah Pie case represents a failure by the Supreme Court to distinguish between injury to competition that benefits consumers and injury to a specific competitor.

A merger between two manufacturers of computers would result in which of the following?

For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:

The primary purpose of antitrust legislation is to:

Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?

The purchase of Michelin Tire Company by General Motors is an example of a vertical merger.

Exhibit 13-1 Cable television monopolist -As shown in Exhibit 13-1, if the cable television monopolist is allowed to maximize profits, it will operate at point:

Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 13: Antitrust and Regulation

Interlocking directorates are illegal under the Clayton Act whether or not the effect is to lessen competition substantially.

Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company?

Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?

Under fair-return pricing, a regulated natural monopoly will earn zero economic profit.

It is against the law in the United States for one person to hold positions on more than one board of directors at a time.

Regulatory commissions may focus on establishing a "fair-return" price to be charged by a monopolist. Under this policy, the monopolist would earn:

Which of the following is illegal under the Sherman Antitrust Act?

The Celler-Kefauver Act of 1950 plugged a technical loophole in the Clayton Act which permitted many large horizontal mergers.

The rule of reason refers to the interpretation of the courts that dominant firms should be broken up because of their:

Which of the following practices is prohibited by the Clayton Act?

The per se rule was introduced in the:

A merger between McDonald's and Burger King would be called a:

According to critics, the Utah Pie case represents a failure by the Supreme Court to distinguish between injury to competition that benefits consumers and injury to a specific competitor.

A merger between two manufacturers of computers would result in which of the following?

For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:

The primary purpose of antitrust legislation is to:

Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?

The purchase of Michelin Tire Company by General Motors is an example of a vertical merger.

Exhibit 13-1 Cable television monopolist -As shown in Exhibit 13-1, if the cable television monopolist is allowed to maximize profits, it will operate at point:

Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters