Question 1

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 2

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 3

Which of the following situations is most likely to be deemed in violation of Section 1 of the Sherman Act?

Accepted Answer

A)  Intent to monopolize 
B)  Attempted monopolization 
C)  Misdirected monopolization 
D)  Conspiracy to monopolize 
A)  Intent to monopolize 
B)  Attempted monopolization 
C)  Misdirected monopolization 
D)  Conspiracy to monopolize

Question 4

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 5

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 6

Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. What is the most likely stand that the Supreme Court will take under these circumstances?

Accepted Answer

A)  Their action will be deemed unlawful according to the rule of reason analysis. 
B)  Their action will be deemed lawful because only sellers can be guilty of price-fixing. 
C)  Their action will be deemed lawful if their agreement results in savings to consumers. 
D)  Their action will be deemed unlawful according to the per se analysis. 
A)  Their action will be deemed unlawful according to the rule of reason analysis. 
B)  Their action will be deemed lawful because only sellers can be guilty of price-fixing. 
C)  Their action will be deemed lawful if their agreement results in savings to consumers. 
D)  Their action will be deemed unlawful according to the per se analysis.

Question 7

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 8

Overbearing, Inc., which manufactures ball bearings, has built up a network of wholesale dealers. Under agreements between Overbearing and various dealers, each dealer has an established geographical territory of operation. These agreements also call for the individual dealers not to compete in another Overbearing dealer's exclusive territory. An appropriate plaintiff has sued Overbearing on the theory that these agreements violate Section 1 of the Sherman Act. What treatment will the court give the agreements? Why? Under that treatment, is it possible for Overbearing to avoid liability even if the existence of the agreements is established by the plaintiff? If so, how?

Accepted Answer

Because the agreements are vertical rest

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

Traditional antitrust thinkers argue that:

Accepted Answer

A)  concentrated economic power may lead to antidemocratic concentrations of political power. 
B)  antitrust regulations should protect competition instead of competitors. 
C)  concentration within a particular industry does not preclude interindustry competition. 
D)  domestic concentration might be necessary for effective international market competition. 
A)  concentrated economic power may lead to antidemocratic concentrations of political power. 
B)  antitrust regulations should protect competition instead of competitors. 
C)  concentration within a particular industry does not preclude interindustry competition. 
D)  domestic concentration might be necessary for effective international market competition.

Question 11

Assume that the Oklahoma Wholesale Lumber Suppliers' Association, a trade association formed by all lumber wholesalers in the state, adopts a "fair competition" plan that divides the state into exclusive territories for member wholesalers. Each member wholesaler is forbidden by the plan to sell to retailers in another wholesaler's territory. Under these circumstances, which of the following is true?

Accepted Answer

A)  Since this is a case of ancillary vertical restraint, the courts would apply the rule of reason to determine whether it is lawful. 
B)  Since this is a case of "naked" horizontal restraint, the courts would apply the per se rule to determine whether it is lawful. 
C)  Since this is a case of ancillary horizontal restraint, the courts would apply the per se rule to determine whether it is lawful. 
D)  Since this is a case of "naked" vertical restraint, the courts would apply the rule of reason to determine whether it is lawful. 
A)  Since this is a case of ancillary vertical restraint, the courts would apply the rule of reason to determine whether it is lawful. 
B)  Since this is a case of "naked" horizontal restraint, the courts would apply the per se rule to determine whether it is lawful. 
C)  Since this is a case of ancillary horizontal restraint, the courts would apply the per se rule to determine whether it is lawful. 
D)  Since this is a case of "naked" vertical restraint, the courts would apply the rule of reason to determine whether it is lawful.

Question 12

After Khan (State Oil Co. v. Khan (1997)) and Leegin (Leegin Creative Leather Products v. PSKS, Inc. (2007)), all forms of vertical price-fixing now receive _____ analysis.

Accepted Answer

A)  quick-look 
B)  rule of reason 
C)  secondary 
D)  per se 
A)  quick-look 
B)  rule of reason 
C)  secondary 
D)  per se

Question 13

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 14

In the famous DuPont cellophane case, the Supreme Court ruled that even though DuPont had a 75 percent market share in cellophane, it did not have monopoly power in cellophane, because:

Accepted Answer

A)  other functionally equivalent products were available in the market. 
B)  DuPont had not acquired its market power through improper means. 
C)  cellophane was not a significant product in Interstate commerce. 
D)  inference of monopoly power requires market share in excess of 80 percent. 
A)  other functionally equivalent products were available in the market. 
B)  DuPont had not acquired its market power through improper means. 
C)  cellophane was not a significant product in Interstate commerce. 
D)  inference of monopoly power requires market share in excess of 80 percent.

Question 15

Federal antitrust laws have been extensively applied to activities affecting the international commerce of the United States.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

A common variation of a(n) _____ agreement is the requirements contract.

Accepted Answer

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

Question 18

Which of the following antitrust activities can be challenged only under the state law?

Accepted Answer

A)  Interstate agreements in restraint of trade. 
B)  Intrastate agreements in restraint of trade. 
C)  Interstate deceptive and unfair practices. 
D)  Intrastate deceptive and unfair practices. 
A)  Interstate agreements in restraint of trade. 
B)  Intrastate agreements in restraint of trade. 
C)  Interstate deceptive and unfair practices. 
D)  Intrastate deceptive and unfair practices.

Question 19

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 20

Once firms have attained monopoly power, only then can they be held for violation of Section 2 of the Sherman Act.

Accepted Answer

A) True 
 B)False

Exam 49: Antitrust: the Sherman Act

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

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

Which of the following situations is most likely to be deemed in violation of Section 1 of the Sherman Act?

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

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

Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. What is the most likely stand that the Supreme Court will take under these circumstances?

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:

Traditional antitrust thinkers argue that:

After Khan (State Oil Co. v. Khan (1997)) and Leegin (Leegin Creative Leather Products v. PSKS, Inc. (2007)), all forms of vertical price-fixing now receive _____ analysis.

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.

In the famous DuPont cellophane case, the Supreme Court ruled that even though DuPont had a 75 percent market share in cellophane, it did not have monopoly power in cellophane, because:

Federal antitrust laws have been extensively applied to activities affecting the international commerce of the United States.

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

A common variation of a(n) _____ agreement is the requirements contract.

Which of the following antitrust activities can be challenged only under the state law?

Resale price maintenance is also known as:

Once firms have attained monopoly power, only then can they be held for violation of Section 2 of the Sherman Act.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

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

Crimes

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 Andformation 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 Agencies

The Federal Trade Commission Act and Consumer Protection Laws

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

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