Question 1

Which of the following situations is most likely to trigger liability for a vertical boycott under Section 1 of the Sherman Act?

Accepted Answer

A)  Evidence indicates that a conspiracy existed between a manufacturer and its nonterminated dealers to terminate a price-cutter. 
B)  Evidence indicates that a manufacturer unilaterally refused to deal with a price-cutter who failed to follow the manufacturer's suggested resale prices. 
C)  Evidence indicates that a manufacturer has terminated a discounting distributor after receiving complaints from its other distributors. 
D)  Evidence indicates that a manufacturer and its nonterminated dealers were engaged in an unlawful vertical price-fixing conspiracy. 
A)  Evidence indicates that a conspiracy existed between a manufacturer and its nonterminated dealers to terminate a price-cutter. 
B)  Evidence indicates that a manufacturer unilaterally refused to deal with a price-cutter who failed to follow the manufacturer's suggested resale prices. 
C)  Evidence indicates that a manufacturer has terminated a discounting distributor after receiving complaints from its other distributors. 
D)  Evidence indicates that a manufacturer and its nonterminated dealers were engaged in an unlawful vertical price-fixing conspiracy.

Question 2

Intent to monopolize is necessary to create violation under the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 3

Resale price maintenance is also known as:

Accepted Answer

A)  horizontal price-fixing. 
B)  vertical divisions of market. 
C)  horizontal divisions of market. 
D)  vertical price-fixing. 
A)  horizontal price-fixing. 
B)  vertical divisions of market. 
C)  horizontal divisions of market. 
D)  vertical price-fixing.

Question 4

When is proof of joint action required for violation of Section 2 of Sherman Act?

Accepted Answer

A)  When a firm enters into an exclusive dealing agreement with a supplier. 
B)  When more than one firm is charged with a conspiracy to monopolize. 
C)  Charges of monopolization do not require any proof of joint action. 
D)  When a firm possesses not only monopoly power but also an intent to monopolize. 
A)  When a firm enters into an exclusive dealing agreement with a supplier. 
B)  When more than one firm is charged with a conspiracy to monopolize. 
C)  Charges of monopolization do not require any proof of joint action. 
D)  When a firm possesses not only monopoly power but also an intent to monopolize.

Question 5

If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman Act,it is entitled to recover:

Accepted Answer

A)  twice the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees. 
B)  twice the amount of loss it suffered as a result of the violation. 
C)  only the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees. 
D)  three times the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees. 
A)  twice the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees. 
B)  twice the amount of loss it suffered as a result of the violation. 
C)  only the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees. 
D)  three times the amount of loss it suffered as a result of the violation,plus court costs and attorney's fees.

Question 6

_____ agreements reduce a manufacturer's sales costs and provide dealers with a secure source of supply.

Accepted Answer

A)  Joint venture 
B)  Exclusive dealing 
C)  Reciprocal dealing 
D)  Formal written 
A)  Joint venture 
B)  Exclusive dealing 
C)  Reciprocal dealing 
D)  Formal written

Question 7

The activities of a corporation and its wholly owned subsidiary will not constitute the concerted action necessary for a violation of Section 1 of the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 8

In 1978,Frieda Stayel opened a donut shop in the town of Fort Garth,Indiana.Her shop,called "Stayel Donuts," was the first of its kind in the community.Over the years,Stayel Donuts acquired a wide following,not only in Fort Garth but also throughout Indiana and even in surrounding states.Persons traveling through Indiana on their way to another state often would go out of their way to stop at Stayel Donuts because of what they had heard about the high quality of the baked goods sold there.Various competing donut shops opened in Fort Garth and in nearby communities during the years following 1978,but all had failed to acquire enough of a following to enable them to stay in business for very long.As of mid-2003,approximately 95 percent of the donuts sold in Fort Garth were Stayel donuts.The latest of Stayel's competitors whose business failed was Duane Duncan,the former operator of "Duncan Donuts." Duncan's attorney has advised him that Stayel has a monopoly on the donut business and that Duncan therefore has a good antitrust claim against Stayel under Section 2 of the Sherman Act? Is the attorney's advice legally sound? Why or why not?

Accepted Answer

In light of the facts,the attorney's adv

Question 9

Before a court can determine a defendant's market share,it must first define the relevant market.One of the components of a relevant market determination is the relevant:

Accepted Answer

A)  resource market. 
B)  supply market. 
C)  geographic market. 
D)  competitive market. 
A)  resource market. 
B)  supply market. 
C)  geographic market. 
D)  competitive market.

Question 10

Market shares in excess of _____ have historically justified an inference of monopoly power.

Accepted Answer

A)  70 percent 
B)  60 percent 
C)  90 percent 
D)  80 percent 
A)  70 percent 
B)  60 percent 
C)  90 percent 
D)  80 percent

Question 11

LMNOP Corp.has been convicted under the Sherman Act for two distinct and separate violations.LMNOP may be fined as much as _____ for these two violations.

Accepted Answer

A)  $50 million 
B)  $100 million 
C)  $200 million 
D)  $150 million 
A)  $50 million 
B)  $100 million 
C)  $200 million 
D)  $150 million

Question 12

The Sherman Act provides that individuals criminally convicted of violating it may be:

Accepted Answer

A)  fined up to $1 million per violation and may be imprisoned for as long as 5 years. 
B)  fined up to $500,000 per violation and may be imprisoned for as long as 10 years. 
C)  fined up to $500,000 per violation and may be imprisoned for as long as 5 years. 
D)  fined up to $1 million per violation and may be imprisoned for as long as 10 years. 
A)  fined up to $1 million per violation and may be imprisoned for as long as 5 years. 
B)  fined up to $500,000 per violation and may be imprisoned for as long as 10 years. 
C)  fined up to $500,000 per violation and may be imprisoned for as long as 5 years. 
D)  fined up to $1 million per violation and may be imprisoned for as long as 10 years.

Question 13

The National Cooperative Research Act (NCRA)that applies to joint research and development ventures (JRDVs):

Accepted Answer

A)  provides that treble damages may be recovered for losses flowing from a JRDV ultimately found to be in violation of Section 1 of the Sherman Act. 
B)  requires firms contemplating a JRDV to provide the Department of Justice and the Federal Trade Commission with advance notice of their intent to do so. 
C)  lacks provisions to allow the parties to a challenged JRDV to recover attorney's fees from an unsuccessful challenger. 
D)  requires application of a per se rule,rather than a reasonableness standard,when a JRDV's legality is determined. 
A)  provides that treble damages may be recovered for losses flowing from a JRDV ultimately found to be in violation of Section 1 of the Sherman Act. 
B)  requires firms contemplating a JRDV to provide the Department of Justice and the Federal Trade Commission with advance notice of their intent to do so. 
C)  lacks provisions to allow the parties to a challenged JRDV to recover attorney's fees from an unsuccessful challenger. 
D)  requires application of a per se rule,rather than a reasonableness standard,when a JRDV's legality is determined.

Question 14

Hem Sylvester Oil Company,owning a chain of wholly owned gas stations,refused to purchase the tires that Sans Corporation sells in some of its stations,unless the tire manufacturer agrees to purchase from the oil company,the petrochemicals used in the tire manufacturing process.This agreement is an example of a(n):

Accepted Answer

A)  exclusive dealing agreement. 
B)  joint venture agreement. 
C)  reciprocal dealing agreement. 
D)  formal written agreement. 
A)  exclusive dealing agreement. 
B)  joint venture agreement. 
C)  reciprocal dealing agreement. 
D)  formal written agreement.

Question 15

The Sherman Act states that corporations convicted of violating it may be fined as much as:

Accepted Answer

A)  $50 million per violation 
B)  $100 million per violation 
C)  $200 million per violation 
D)  $150 million per violation 
A)  $50 million per violation 
B)  $100 million per violation 
C)  $200 million per violation 
D)  $150 million per violation

Question 16

Under Section 1 of the Sherman Act,a corporation's employees can be guilty of a conspiracy provided they conspire with:

Accepted Answer

A)  either the board of directors or the senior management of the corporation. 
B)  the employees of a wholly owned subsidiary firm. 
C)  the employees of an independent,competitor firm. 
D)  the employees of a subsidiary in which the parent has a controlling interest. 
A)  either the board of directors or the senior management of the corporation. 
B)  the employees of a wholly owned subsidiary firm. 
C)  the employees of an independent,competitor firm. 
D)  the employees of a subsidiary in which the parent has a controlling interest.

Question 17

In United States v.Colgate & Co.(1919),the Supreme Court:

Accepted Answer

A)  overruled a long-standing precedent that had required per se treatment for vertical maximum price-fixing. 
B)  reaffirmed that horizontal divisions of markets are illegal per se and plainly represent agreements not to compete. 
C)  held that a manufacturer could unilaterally refuse to deal with those who failed to follow the manufacturer's suggested resale prices. 
D)  held that vertical minimum price-fixing would be judged under the rule of reason rather than the per se approach. 
A)  overruled a long-standing precedent that had required per se treatment for vertical maximum price-fixing. 
B)  reaffirmed that horizontal divisions of markets are illegal per se and plainly represent agreements not to compete. 
C)  held that a manufacturer could unilaterally refuse to deal with those who failed to follow the manufacturer's suggested resale prices. 
D)  held that vertical minimum price-fixing would be judged under the rule of reason rather than the per se approach.

Question 18

The following statements pertain to alleged violations of Section 1 of the Sherman Act.Which statement is accurate?

Accepted Answer

A)  Although tying agreements are classified as per se violations of Section 1,the judicial treatment given to them differs from pure per se treatment. 
B)  Because vertical restraints on distribution necessarily harm intrabrand competition,they are considered per se violations of Section 1. 
C)  Because group boycotts amount to reprehensible conduct that cannot have competitive justification,all such agreements are considered per se violations of Section 1. 
D)  Although concerted action ordinarily has been required in order for there to have been a violation of Section 1,the Supreme Court recently dispensed with the requirement in price-fixing cases. 
A)  Although tying agreements are classified as per se violations of Section 1,the judicial treatment given to them differs from pure per se treatment. 
B)  Because vertical restraints on distribution necessarily harm intrabrand competition,they are considered per se violations of Section 1. 
C)  Because group boycotts amount to reprehensible conduct that cannot have competitive justification,all such agreements are considered per se violations of Section 1. 
D)  Although concerted action ordinarily has been required in order for there to have been a violation of Section 1,the Supreme Court recently dispensed with the requirement in price-fixing cases.

Question 19

Which of the following has been recognized by the courts as a possible justification for tying agreements?

Accepted Answer

A)  The tying product functions properly only if used with the tied product. 
B)  The tying product is not available for purchase without the agreement. 
C)  The tying agreement involves two separate and distinct items. 
D)  The seller is the market leader in both the tying and tied product categories. 
A)  The tying product functions properly only if used with the tied product. 
B)  The tying product is not available for purchase without the agreement. 
C)  The tying agreement involves two separate and distinct items. 
D)  The seller is the market leader in both the tying and tied product categories.

Question 20

Courts tend to treat _____ similarly because they are similar in motivation and effect.

Accepted Answer

A)  exclusive dealing and reciprocal dealing agreements 
B)  joint venture agreements and exclusive dealing agreements 
C)  joint venture agreements and tying agreements 
D)  reciprocal dealing agreements and tying agreements 
A)  exclusive dealing and reciprocal dealing agreements 
B)  joint venture agreements and exclusive dealing agreements 
C)  joint venture agreements and tying agreements 
D)  reciprocal dealing agreements and tying agreements

Exam 49: Antitrust: the Sherman Act

Which of the following situations is most likely to trigger liability for a vertical boycott under Section 1 of the Sherman Act?

Intent to monopolize is necessary to create violation under the Sherman Act.

Resale price maintenance is also known as:

When is proof of joint action required for violation of Section 2 of Sherman Act?

If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman Act,it is entitled to recover:

_____ agreements reduce a manufacturer's sales costs and provide dealers with a secure source of supply.

The activities of a corporation and its wholly owned subsidiary will not constitute the concerted action necessary for a violation of Section 1 of the Sherman Act.

Before a court can determine a defendant's market share,it must first define the relevant market.One of the components of a relevant market determination is the relevant:

Market shares in excess of _____ have historically justified an inference of monopoly power.

LMNOP Corp.has been convicted under the Sherman Act for two distinct and separate violations.LMNOP may be fined as much as _____ for these two violations.

The Sherman Act provides that individuals criminally convicted of violating it may be:

The National Cooperative Research Act (NCRA)that applies to joint research and development ventures (JRDVs):

The Sherman Act states that corporations convicted of violating it may be fined as much as:

Under Section 1 of the Sherman Act,a corporation's employees can be guilty of a conspiracy provided they conspire with:

In United States v.Colgate & Co.(1919),the Supreme Court:

The following statements pertain to alleged violations of Section 1 of the Sherman Act.Which statement is accurate?

Which of the following has been recognized by the courts as a possible justification for tying agreements?

Courts tend to treat _____ similarly because they are similar in motivation and effect.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

The Clayton Act, the Robinson-Patman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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