Question 1

Antitrust policy remained constant throughout the 1900s.

Accepted Answer

A) True 
 B)False  False

Question 2

The Sherman Act was designed to prevent extreme concentrations of economic power.

Accepted Answer

A) True 
 B)False  True

Question 3

In the case of United States v.Waste Management,Inc.,the U.S.Court of Appeals had to consider whether a merger of two large trash removal services was illegal.The merger created a company that controlled nearly 50 percent of the Dallas,Texas regional market.The court ruled that:

Accepted Answer

A)  such merger created a presumption of illegality. 
B)  the merger was not illegal since it did not substantially lessen competition in the relevant market. 
C)  Both of the above are correct. 
D)  None of the above. 
A)  such merger created a presumption of illegality. 
B)  the merger was not illegal since it did not substantially lessen competition in the relevant market. 
C)  Both of the above are correct. 
D)  None of the above. C

Question 4

The Clayton Act prohibits anticompetitive mergers.

Accepted Answer

A) True 
 B)False

Question 5

Smalltown has two family-owned hardware stores that have been in business for years.Major Hardware decides that Smalltown would be a good place to build one of its superstores.Major opens,advertising unbelievably low prices;in fact,at below cost.Because Major owns stores nationally,it is able to keep prices extremely low until both of the family-owned stores have to go out of business because they cannot compete.After Major is the only hardware store in town,it raises its prices enough to make up for its former losses and to make some additional profit.Discuss this behavior in relation to antitrust law.

Accepted Answer

Major has engaged in predatory pricing.I

Question 6

Under the Robinson-Patman Act,charging different prices to different purchasers is always illegal.

Accepted Answer

A) True 
 B)False

Question 7

Horizontal cooperative strategies would include all EXCEPT:

Accepted Answer

A)  market division. 
B)  price fixing. 
C)  reciprocal dealing. 
D)  bid-rigging. 
A)  market division. 
B)  price fixing. 
C)  reciprocal dealing. 
D)  bid-rigging.

Question 8

A major motion picture distributor offers to provide a television station with three very popular,desirable films.However,as part of the agreement,the distributor requires that the television station also purchase four films that are not very desirable.This type of arrangement is called a:

Accepted Answer

A)  reciprocal dealing agreement. 
B)  tying arrangement. 
C)  joint custody arrangement. 
D)  reverter arrangement. 
A)  reciprocal dealing agreement. 
B)  tying arrangement. 
C)  joint custody arrangement. 
D)  reverter arrangement.

Question 9

Both the Justice Department and the Federal Trade Commission can bring criminal proceedings under the antitrust laws.

Accepted Answer

A) True 
 B)False

Question 10

The only defense available to a defendant in a per se violation is that the violation never occurred.

Accepted Answer

A) True 
 B)False

Question 11

A monopoly is illegal:

Accepted Answer

A)  under any circumstances, under Section 2 of the Sherman Act. 
B)  only if it is gained or maintained by using wrongful tactics. 
C)  if you have greater than 50 percent of market share. 
D)  any time there are no interchangeable products. 
A)  under any circumstances, under Section 2 of the Sherman Act. 
B)  only if it is gained or maintained by using wrongful tactics. 
C)  if you have greater than 50 percent of market share. 
D)  any time there are no interchangeable products.

Question 12

Explain the overall purposes of the Sherman Antitrust Act,the Clayton Act,and the Robinson-Patman Act.How do each of these Acts relate to each other?

Accepted Answer

The Sherman Antitrust Act was created in

Question 13

A refusal to deal:

Accepted Answer

A)  is a right to decide with whom to do or not to do business and cannot be legally limited. 
B)  is a rule of reason violation of the Sherman Act and is illegal if it harms competition. 
C)  is an agreement in which a buyer refuses to purchase goods from a supplier unless the supplier also purchases items from the buyer. 
D)  occurs when a manager refuses to recognize that price-fixing is a problem. 
A)  is a right to decide with whom to do or not to do business and cannot be legally limited. 
B)  is a rule of reason violation of the Sherman Act and is illegal if it harms competition. 
C)  is an agreement in which a buyer refuses to purchase goods from a supplier unless the supplier also purchases items from the buyer. 
D)  occurs when a manager refuses to recognize that price-fixing is a problem.

Question 14

Gorhan Construction,Brighton Bros.,and Tirenn Construction agreed that on three upcoming projects,Gorhan would bid lowest on one,Brighton would submit the lowest bid on the second project,and Tirenn would submit the lowest bid on the third project.In this way,they would each be assured of work for the upcoming season.This behavior:

Accepted Answer

A)  is legal and an acceptable practice in the construction industry to spread work more evenly. 
B)  is a per se violation of the Sherman Act. 
C)  is a rule of reason violation of the Sherman Act. 
D)  violates ethical, but not legal, standards. 
A)  is legal and an acceptable practice in the construction industry to spread work more evenly. 
B)  is a per se violation of the Sherman Act. 
C)  is a rule of reason violation of the Sherman Act. 
D)  violates ethical, but not legal, standards.

Question 15

Both "per se" and "rule of reason" violations of the Sherman Act are automatically illegal.

Accepted Answer

A) True 
 B)False

Question 16

Since companies have the right to decide with whom they will or will not do business,a refusal to deal is not a violation of the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 17

The Clayton Act:

Accepted Answer

A)  was passed because the courts were too strict in their enforcement of the Sherman Act. 
B)  was passed to clarify the provisions of the Sherman Act. 
C)  contained provisions intended to eliminate price discrimination that reduced competition. 
D)  All the above. 
A)  was passed because the courts were too strict in their enforcement of the Sherman Act. 
B)  was passed to clarify the provisions of the Sherman Act. 
C)  contained provisions intended to eliminate price discrimination that reduced competition. 
D)  All the above.

Question 18

In determining if an exclusive dealing contract has an anticompetitive impact on the market,a court would consider all but which of the following factors?

Accepted Answer

A)  The number of other distributors available. 
B)  The portion of the market foreclosed by the exclusive dealing agreement. 
C)  The number of previous antitrust violations by the parties to the agreement. 
D)  The ease with which new distributors can enter the market. 
A)  The number of other distributors available. 
B)  The portion of the market foreclosed by the exclusive dealing agreement. 
C)  The number of previous antitrust violations by the parties to the agreement. 
D)  The ease with which new distributors can enter the market.

Question 19

What is the Justice Department's current position relative to reciprocal dealing agreements?

Accepted Answer

A)  The Justice Department actively enforces this illegal activity. 
B)  The Justice Department is only concerned about these agreements if a large, national company is involved. 
C)  The Justice Department only gets involved if such an agreement will foreclose a significant share of the market and if the participants agreed not to buy from other competitors. 
D)  None of the above is correct. 
A)  The Justice Department actively enforces this illegal activity. 
B)  The Justice Department is only concerned about these agreements if a large, national company is involved. 
C)  The Justice Department only gets involved if such an agreement will foreclose a significant share of the market and if the participants agreed not to buy from other competitors. 
D)  None of the above is correct.

Question 20

The post Chicago School's position on antitrust policy would be to ask:

Accepted Answer

A)  "Has a competitor been harmed?" 
B)  "Has competition been harmed?" 
C)  "Will competitors be allowed to freely enter the market?" 
D)  "Will this action cause consumers to pay higher prices?" 
A)  "Has a competitor been harmed?" 
B)  "Has competition been harmed?" 
C)  "Will competitors be allowed to freely enter the market?" 
D)  "Will this action cause consumers to pay higher prices?"

Exam 21: Antitrust

Antitrust policy remained constant throughout the 1900s.

The Sherman Act was designed to prevent extreme concentrations of economic power.

In the case of United States v.Waste Management,Inc.,the U.S.Court of Appeals had to consider whether a merger of two large trash removal services was illegal.The merger created a company that controlled nearly 50 percent of the Dallas,Texas regional market.The court ruled that:

The Clayton Act prohibits anticompetitive mergers.

Under the Robinson-Patman Act,charging different prices to different purchasers is always illegal.

Horizontal cooperative strategies would include all EXCEPT:

A major motion picture distributor offers to provide a television station with three very popular,desirable films.However,as part of the agreement,the distributor requires that the television station also purchase four films that are not very desirable.This type of arrangement is called a:

Both the Justice Department and the Federal Trade Commission can bring criminal proceedings under the antitrust laws.

The only defense available to a defendant in a per se violation is that the violation never occurred.

A monopoly is illegal:

Explain the overall purposes of the Sherman Antitrust Act,the Clayton Act,and the Robinson-Patman Act.How do each of these Acts relate to each other?

A refusal to deal:

Both "per se" and "rule of reason" violations of the Sherman Act are automatically illegal.

Since companies have the right to decide with whom they will or will not do business,a refusal to deal is not a violation of the Sherman Act.

The Clayton Act:

In determining if an exclusive dealing contract has an anticompetitive impact on the market,a court would consider all but which of the following factors?

What is the Justice Department's current position relative to reciprocal dealing agreements?

The post Chicago School's position on antitrust policy would be to ask:

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