Question 1

What does a judge consider when conducting a rule-of-reason analysis?

Accepted Answer

When engaging in rule-of-reason analysis, a judge considers the following: (1) the nature and purpose of the restraint on trade, (2) the scope of the restraint, (3) the effect of the restraint on business and competition, and (4) the intent of the restraint.

Question 2

Which of the following is the type of violation of Section 1 of the Sherman Act that is involved when it is determined that business practices always hurt consumers?

Accepted Answer

A)  Rule-of-reason 
B)  Per se 
C)  Quick-look 
D)  Consumer 
E)  Three-prong 
A)  Rule-of-reason 
B)  Per se 
C)  Quick-look 
D)  Consumer 
E)  Three-prong B

Question 3

Which of the following references the type of conglomerate merger that occurs when a company merges with another company producing a related product in order to add the related product to the company's production?

Accepted Answer

A)  Horizontal extension 
B)  Market extension 
C)  Diversification 
D)  Vertical extension 
E)  Product extension 
A)  Horizontal extension 
B)  Market extension 
C)  Diversification 
D)  Vertical extension 
E)  Product extension E

Question 4

A merger between two or more companies producing the same or similar products is a ______ merger.

Accepted Answer

A)  Horizontal 
B)  Vertical 
C)  Conglomerate 
D)  Joining 
E)  Predatory 
A)  Horizontal 
B)  Vertical 
C)  Conglomerate 
D)  Joining 
E)  Predatory

Question 5

When was the Sherman Act enacted?

Accepted Answer

A)  1890 
B)  1925 
C)  1935 
D)  1943 
E)  1958 
A)  1890 
B)  1925 
C)  1935 
D)  1943 
E)  1958

Question 6

When a company merges with another company that is not a competitor or a buyer or seller to the company, that merger is called a ______ merger.

Accepted Answer

A)  Horizontal 
B)  Vertical 
C)  Conglomerate 
D)  Joining 
E)  Predatory 
A)  Horizontal 
B)  Vertical 
C)  Conglomerate 
D)  Joining 
E)  Predatory

Question 7

Which of the following is false regarding private enforcement of antitrust laws?

Accepted Answer

A)  A private party can bring suit under the Clayton Act. 
B)  A private party can bring suit under the Sherman Act. 
C)  Under the Sherman Act a private party may receive treble damages. 
D)  A private party who prevails may receive attorney fees under the Sherman Act and under the Clayton Act. 
E)  Private parties are responsible for only a minority of antitrust claims brought to court in recent years. 
A)  A private party can bring suit under the Clayton Act. 
B)  A private party can bring suit under the Sherman Act. 
C)  Under the Sherman Act a private party may receive treble damages. 
D)  A private party who prevails may receive attorney fees under the Sherman Act and under the Clayton Act. 
E)  Private parties are responsible for only a minority of antitrust claims brought to court in recent years.

Question 8

Farmers are prohibited by antitrust laws from belonging to cooperatives that set prices.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following standards allows a defendant to offer justification for a per se violation of Section 1 of the Sherman Act, in which case the court will engage in a rule-of-reason analysis?

Accepted Answer

A)  Quick-look 
B)  Reasonableness 
C)  Justifiable 
D)  Necessary 
E)  Needful 
A)  Quick-look 
B)  Reasonableness 
C)  Justifiable 
D)  Necessary 
E)  Needful

Question 10

Chicago School theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic ____.

Accepted Answer

A)  Control 
B)  Regulation 
C)  Efficiency 
D)  Competition 
E)  Success 
A)  Control 
B)  Regulation 
C)  Efficiency 
D)  Competition 
E)  Success

Question 11

When a company prices one product below normal cost until competitors are eliminated and then sharply increases the price, the company is practicing ______ pricing.

Accepted Answer

A)  Competitive 
B)  Predatory 
C)  Secondary 
D)  Horizontal 
E)  Primary 
A)  Competitive 
B)  Predatory 
C)  Secondary 
D)  Horizontal 
E)  Primary

Question 12

"On the Town." Benny began taking people on tours of historic sites in his town. That had not been done before because no one thought there was very much in the way of historical significance there. Benny, however, did some research; and, with a very active imagination on his part, came up with some good stories. He started to make a nice profit with the tours, particularly with tourists passing through the town on the way to the mountains. Benny began to hear of some rival tour groups that were planning to start giving tours in the area. Benny sent a memo to his secretary asking, "How can we shut down other potential tour groups because we want all the business?" One rival company had started operations, but Benny still had 85 percent of the business. His plan was to run the rival out of business and prevent the start-up of any other tour operations in his town. Benny decided that he would offer to do a free advertising brochure to any business that would put up a poster advertising his tour group and agree not to advertise or mention in any way any other tour group. Benny was particularly successful in reaching that agreement with hotels and restaurants in his town because of his likeable personality. When Prudence, who ran a rival tour group heard about Benny's actions, she was furious and accused him of an antitrust violation because he was trying to keep all the tour action for himself. Benny told Prudence she was nuts and that the only reason she had no business was that she stuck to dry historical fact on her tours and did not do research on romantic relationships between individuals in the area in order to "spice-up" her tours. He also told her that he was not a monopolist because he did not have all the business as evidenced by Prudence's own tour service.
-What must be proven against Benny in order to establish that he violated antitrust laws through conduct involving monopolization?

Accepted Answer

A)  Only that he had market power. 
B)  That he (1) possessed market power and (2) unfairly achieved the market power. 
C)  The he (1) possessed market power and (2) used the market power unfairly. 
D)  That he (1) possessed market power, (2) that he unfairly achieved the market power, and (3) that he used the market power for abuse. 
E)  That he (1) possessed market power, and (2) unfairly achieved the market power or used the market power for abuse. 
A)  Only that he had market power. 
B)  That he (1) possessed market power and (2) unfairly achieved the market power. 
C)  The he (1) possessed market power and (2) used the market power unfairly. 
D)  That he (1) possessed market power, (2) that he unfairly achieved the market power, and (3) that he used the market power for abuse. 
E)  That he (1) possessed market power, and (2) unfairly achieved the market power or used the market power for abuse.

Question 13

A business arrangement in which stock owners appoint beneficiaries and place their securities with trustees who manage the company and pay a share of their earnings to the stockholders is referred to as a trust.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following was the result in Continental T.V. Inc., v. GTE Sylvania Inc., the U.S. Supreme Court case in which Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product?

Accepted Answer

A)  The court upheld the continued used of the bright line per se rule of illegality for all vertical restrictions. 
B)  That the rule-of-reason should always be applied when vertical restrictions are involved. 
C)  That the rule-of-reason standard should be applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect. 
D)  That a per se rule of illegality is applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect. 
E)  That the per se rule of illegality is applied in a vertical restriction case only when a manufacturing defendant is involved; otherwise, the rule-of-reason test applies. 
A)  The court upheld the continued used of the bright line per se rule of illegality for all vertical restrictions. 
B)  That the rule-of-reason should always be applied when vertical restrictions are involved. 
C)  That the rule-of-reason standard should be applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect. 
D)  That a per se rule of illegality is applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect. 
E)  That the per se rule of illegality is applied in a vertical restriction case only when a manufacturing defendant is involved; otherwise, the rule-of-reason test applies.

Question 15

When two parties at different levels in the manufacturing and distribution process make an agreement that restrains trade, they have made a ______ restraint against trade.

Accepted Answer

A)  Horizontal 
B)  Corresponding 
C)  Lateral 
D)  Vertical 
E)  Regulatory 
A)  Horizontal 
B)  Corresponding 
C)  Lateral 
D)  Vertical 
E)  Regulatory

Question 16

"On the Town." Benny began taking people on tours of historic sites in his town. That had not been done before because no one thought there was very much in the way of historical significance there. Benny, however, did some research; and, with a very active imagination on his part, came up with some good stories. He started to make a nice profit with the tours, particularly with tourists passing through the town on the way to the mountains. Benny began to hear of some rival tour groups that were planning to start giving tours in the area. Benny sent a memo to his secretary asking, "How can we shut down other potential tour groups because we want all the business?" One rival company had started operations, but Benny still had 85 percent of the business. His plan was to run the rival out of business and prevent the start-up of any other tour operations in his town. Benny decided that he would offer to do a free advertising brochure to any business that would put up a poster advertising his tour group and agree not to advertise or mention in any way any other tour group. Benny was particularly successful in reaching that agreement with hotels and restaurants in his town because of his likeable personality. When Prudence, who ran a rival tour group heard about Benny's actions, she was furious and accused him of an antitrust violation because he was trying to keep all the tour action for himself. Benny told Prudence she was nuts and that the only reason she had no business was that she stuck to dry historical fact on her tours and did not do research on romantic relationships between individuals in the area in order to "spice-up" her tours. He also told her that he was not a monopolist because he did not have all the business as evidenced by Prudence's own tour service.
-Which of the following is true regarding Benny's claim that he could not have a monopoly because Prudence was also operating a tour service?

Accepted Answer

A)  He was correct. 
B)  He was incorrect; and if a company enjoys 70 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
C)  He was incorrect; and if a company enjoys 60 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
D)  He was incorrect; and if a company enjoys 51 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
E)  He was incorrect; and if a company enjoys 40 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
A)  He was correct. 
B)  He was incorrect; and if a company enjoys 70 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
C)  He was incorrect; and if a company enjoys 60 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
D)  He was incorrect; and if a company enjoys 51 percent of the relevant market, the court will usually hold that the firm has monopoly power. 
E)  He was incorrect; and if a company enjoys 40 percent of the relevant market, the court will usually hold that the firm has monopoly power.

Question 17

Which of the following is true if a seller engages in price discrimination in order to compete in good faith with another seller's low price?

Accepted Answer

A)  That is not a defense, and the seller has violated the Clayton Act. 
B)  That is not a defense, and the seller has violated the Sherman Act. 
C)  That is a valid defense to price discrimination called the meeting-the-competition defense. 
D)  That is a valid defense to price discrimination called the legitimate-price-discrimination defense. 
E)  That is a valid defense to price discrimination called the meet-the-offense defense. 
A)  That is not a defense, and the seller has violated the Clayton Act. 
B)  That is not a defense, and the seller has violated the Sherman Act. 
C)  That is a valid defense to price discrimination called the meeting-the-competition defense. 
D)  That is a valid defense to price discrimination called the legitimate-price-discrimination defense. 
E)  That is a valid defense to price discrimination called the meet-the-offense defense.

Question 18

Which of the following is false regarding antitrust law in Japan?

Accepted Answer

A)  Mergers are regulated. 
B)  Cartels are illegal if they restrain competition substantially contrary to public interest. 
C)  Unfair business practices are banned. 
D)  Keiretsu as a group have been outlawed. 
E)  The law prohibits private monopolization. 
A)  Mergers are regulated. 
B)  Cartels are illegal if they restrain competition substantially contrary to public interest. 
C)  Unfair business practices are banned. 
D)  Keiretsu as a group have been outlawed. 
E)  The law prohibits private monopolization.

Question 19

Section 2 of the Sherman Act applies to states, and they may be used as defendants.

Accepted Answer

A) True 
 B)False

Question 20

Set forth and describe the three specific types of injuries under the Robinson-Patman Act.

Accepted Answer

The three specific types of injuries are

Exam 47: Antitrust Law

What does a judge consider when conducting a rule-of-reason analysis?

Which of the following is the type of violation of Section 1 of the Sherman Act that is involved when it is determined that business practices always hurt consumers?

Which of the following references the type of conglomerate merger that occurs when a company merges with another company producing a related product in order to add the related product to the company's production?

A merger between two or more companies producing the same or similar products is a ______ merger.

When was the Sherman Act enacted?

When a company merges with another company that is not a competitor or a buyer or seller to the company, that merger is called a ______ merger.

Which of the following is false regarding private enforcement of antitrust laws?

Farmers are prohibited by antitrust laws from belonging to cooperatives that set prices.

Which of the following standards allows a defendant to offer justification for a per se violation of Section 1 of the Sherman Act, in which case the court will engage in a rule-of-reason analysis?

Chicago School theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic ____.

When a company prices one product below normal cost until competitors are eliminated and then sharply increases the price, the company is practicing ______ pricing.

A business arrangement in which stock owners appoint beneficiaries and place their securities with trustees who manage the company and pay a share of their earnings to the stockholders is referred to as a trust.

Which of the following was the result in Continental T.V. Inc., v. GTE Sylvania Inc., the U.S. Supreme Court case in which Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product?

When two parties at different levels in the manufacturing and distribution process make an agreement that restrains trade, they have made a ______ restraint against trade.

Which of the following is true if a seller engages in price discrimination in order to compete in good faith with another seller's low price?

Which of the following is false regarding antitrust law in Japan?

Section 2 of the Sherman Act applies to states, and they may be used as defendants.

Set forth and describe the three specific types of injuries under the Robinson-Patman Act.

An Introduction to Dynamic Business Law

Business Ethics

The US Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

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