Deck 33: Antitrust Law and Unfair Trade Practices

Question 1

The ________ is a rule that is applicable to restraints of trade considered inherently anticompetitive.

A) consent decree
B) Noerr doctrine
C) per se rule
D) rule of reason

Answer 1

C

Question 2

________ damages are the only damages that may be recovered for violations of the FTC Act.

A) Treble
B) Double
C) Potential
D) Actual

Answer 2

D

Question 3

A private plaintiff has ________ years from the date on which an antitrust injury occurred to bring a private civil treble-damages action because only damages incurred during this period are recoverable.

A) three
B) two
C) five
D) four

Answer 3

D

Question 4

Which of the following is true of antitrust laws?

A) Antitrust laws are fixed and unchangeable.
B) Each new administration adopts a different policy for enforcing antitrust laws.
C) Federal antitrust laws provide for government lawsuits and exclude private lawsuits from their purview.
D) Treble damages cannot be sought in antitrust lawsuits.

Question 5

The ________ is a federal statute,enacted in 1890,that makes certain restraints of trade and monopolistic acts illegal.

A) Federal Trade Commission Act
B) Robinson-Patman Act
C) Clayton Act
D) Sherman Act

Question 6

Three of the largest petroleum refineries in the country have come to an agreement about what price they would pay to purchase crude oil from sellers.This is an example of ________.

A) sellers' illegal per se price fixing
B) sellers' illegal group boycott
C) buyers' illegal per se price fixing
D) buyers' illegal market sharing

Question 7

The three largest cola manufacturers in a country agree among themselves that each one will sell the products only in certain predetermined geographical "territories." This is an example of ________.

A) accommodation
B) price fixing
C) market sharing
D) group boycott

Question 8

Price fixing ________.

A) is a reasonable violation of Section 1 of the Sherman Act
B) is a process seen exclusively among sellers of goods and services
C) is permissible as it helps consumers or protects competitors from ruinous competition
D) also involves fixing the quantity of a product or service to be produced or provided

Question 9

________ is a restraint of trade in which competitors agree that each will serve only a designated portion of the market.

A) Resale market price maintenance
B) Profit-sharing
C) Market sharing
D) Gainsharing

Question 10

The ________ is a federal statute,enacted in 1930,that prohibits price discrimination.

A) Sherman Act
B) Clayton Act
C) Robinson-Patman Act
D) Federal Trade Commission Act

Question 11

Price fixing is a ________ violation of Section 1 of the Sherman Act.

A) reasonable
B) per se
C) justifiable
D) permissible

Question 12

A restraint of trade in which two or more competitors at one level of distribution agree not to deal with others at another level of distribution is known as ________.

A) group boycott
B) resale price maintenance
C) price fixing
D) market sharing

Question 13

Which of the following horizontal restraints of trade contains the element of monopoly?

A) conscious parallelism
B) market sharing
C) group boycott
D) exchange of nonprice information

Question 14

________ are a series of laws enacted to specifically limit anticompetitive behavior and monopolistic practices in almost all industries,businesses,and professions operating in the United States.

A) Contract laws
B) Antitrust laws
C) Laissez-faire laws
D) Canon laws

Question 15

A(n)________ is a type of plea where the defendant pays a penalty without admission of guilt.

A) nolo contendere
B) arraignment
C) indictment
D) plea bargain

Question 16

Under the ________,the court must examine the pro- and anticompetitive effects of a challenged restraint.

A) Noerr doctrine
B) rule of reason
C) per se rule
D) consent decree

Question 17

The rule of reason is characterized by ________.

A) an automatic violation of Section 1 of the Sherman Act
B) an inherently anticompetitive nature
C) a lack of need for any evidence to deem the restraint unreasonable
D) an evaluation of the company's market share, power, and other facets

Question 18

Which of the following is true of the per se rule in restraint of trade?

A) It does not permit any defenses and justifications to save the restraint of trade.
B) It applies only to restraints that are found to be unreasonable with certain evidentiary standards being met.
C) It applies to restraints that are based primarily on the firm's market share and power.
D) It requires a balancing of the positive and negative effects of the challenged restraint.

Question 19

Which of the following is the only act that includes criminal sanctions for the usage of unfair trade practices?

A) the Clayton Act
B) the Sherman Act
C) the Robinson-Patman Act
D) the Federal Trade Commission Act

Question 20

The two tests the U.S.Supreme Court has developed for determining the lawfulness of a restraint under Section 1 of the Sherman Act are the rule of reason and the ________.

A) Noerr doctrine
B) per se rule
C) nolo contendere rule
D) Colgate doctrine

Question 21

Which of the following defenses to monopolization can an electricity supplier to a small town,that can support only one competitor,claim?

A) relevant market
B) willful monopolizing
C) innocent acquisition
D) natural monopoly

Question 22

Restraints of trade that are unlawful under Section 1 of the Sherman Act if their anticompetitive effects outweigh their procompetitive effects are known as ________.

A) nonprice vertical restraints
B) group boycotts
C) division of markets
D) resale price maintenance measures

Question 23

Conscious parallelism is seen when ________.

A) parties at different levels enter into an agreement to adhere to a price schedule that stabilizes prices
B) one party makes an independent choice not to deal with another
C) two or more firms act the same but no concerted action is shown
D) a party's anticompetitive effects outweigh their procompetitive effects

Question 24

A number of stores agree to stop stocking handsets by a certain manufacturer of mobile phones.This is an example of ________.

A) conscious parallelism
B) price fixing
C) accommodation
D) group boycott

Question 25

Section 2 of the Sherman Act ________.

A) upholds predatory pricing
B) outlaws monopolies
C) requires identification of the relevant market
D) does not require that the defendant possess monopoly power

Question 26

Which of the following is true of the Colgate doctrine?

A) It is not a violation of Section 1 of the Sherman Act.
B) It is an example of a horizontal restraint of trade.
C) It is a per se violation of Section 1 of the Sherman Act.
D) It is a rule of reason violation of Section 1 of the Sherman Act.

Question 27

Which of the following is a vertical restraint of trade?

A) group boycott
B) price fixing
C) resale price maintenance
D) division of markets

Question 28

A relevant market is characterized by the presence of ________.

A) unique goods and services
B) reasonably interchangeable goods and services
C) highly differentiated goods and services
D) pure monopoly of the defendant's goods and products

Question 29

________ is an antitrust principle which says that two or more persons can petition the executive,legislative,or judicial branch of the government or administrative agencies to enact laws or take other action without violating antitrust laws.

A) Noerr doctrine
B) Colgate doctrine
C) Nolo contendere
D) Small company doctrine

Question 30

The ________,which was enacted in 1950,widened the scope of Section 7 of the Clayton Act to include asset acquisitions.

A) Hart-Scott-Rodino Antitrust Improvement Act
B) Sherman Act
C) Celler-Kefauver Act
D) Robinson-Patman Act

Question 31

The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act is examined by applying the ________.

A) Colgate doctrine
B) Noerr doctrine
C) per se rule
D) rule of reason

Question 32

Which of the following is a per se violation of Section 1 of the Sherman Act?

A) horizontal price fixing
B) price discrimination
C) a unilateral refusal to deal
D) conscious parallelism

Question 33

Which of the following is a horizontal restraint of trade?

A) resale price maintenance
B) division of markets
C) unilateral refusal to deal
D) conscious parallelism

Question 34

Monopoly power is characterized by a(n)________.

A) market share of below 20 percent
B) inability to control prices in the market
C) ability to exclude competition from other sellers
D) presence of multiple substitute goods at competing prices

Question 35

A merger between two or more companies that compete in the same business and geographical market is known as a ________.

A) horizontal merger
B) vertical merger
C) market extension merger
D) conglomerate merger

Question 36

A per se violation of Section 1 of the Sherman Act that occurs when a party at one level of distribution enters into an agreement with a party at another level to adhere to a price schedule that either sets or stabilizes prices is known as ________.

A) a group boycott
B) horizontal price fixing
C) resale price maintenance
D) nonprice vertical restraints

Question 37

A(n)________ is an independent choice made by one party not to deal with another party.

A) nonprice vertical restraint
B) monopoly to deal
C) unilateral refusal to deal
D) accommodation

Question 38

The rationale behind the ________ is that the right to petition the government has precedence because it is guaranteed by the Bill of Rights.

A) failing company doctrine
B) unfair advantage theory
C) Noerr doctrine
D) Colgate doctrine

Question 39

The four largest automobile manufacturers in a country each individually come to a decision to stop purchasing tires from a certain company.In accordance with the ________ doctrine,they cannot be charged with a violation of Section 1 of the Sherman Act.

A) conscious parallelism
B) Noerr
C) Colgate
D) failing company

Question 40

Which of the following is a defense to a charge of monopoly?

A) the Noerr doctrine
B) innocent acquisition
C) conscious parallelism
D) predatory pricing

Question 41

________ is a defense in a Section 2(a)action which provides that a seller's price discrimination is not unlawful if the price differential is due to "differences in the cost of manufacture,sale,or delivery" of the product.

A) Natural monopoly defense
B) Meeting the competition defense
C) Changing conditions defense
D) Cost justification defense

Question 42

________ is a restraint of trade in which a seller refuses to sell one product to a customer unless the customer agrees to purchase a second product from the seller.

A) Tying arrangement
B) Predatory pricing
C) Price fixing
D) Group boycott

Question 43

The ________ doctrine is considered to be a primary defense to Section 7 of the Clayton Act.

A) Noerr
B) Colgate
C) failing company
D) conscious parallelism

Question 44

The ________ is a federal statute that prohibits price discrimination in the sale of goods if certain requirements are met.

A) Robinson-Patman Act
B) Sherman Act
C) Celler-Kefauver Act
D) Hart-Scott-Rodino Antitrust Improvement Act

Question 45

Which of the following businesses and activities enjoy a statutory exemption from antitrust laws?

A) airlines
B) law firms
C) agricultural cooperatives
D) all professional sports and games

Question 46

Which of the following is an element of direct price discrimination that must be shown to prove a violation of Section 2(a)of the Robinson-Patman Act?

A) unilateral refusal to deal
B) group boycott
C) sales to two or more purchasers
D) willful monopolizing

Question 47

________ are mergers between firms in totally unrelated businesses.

A) Market extension mergers
B) Conglomerate mergers
C) Horizontal mergers
D) Forward vertical mergers

Question 48

Which of the following businesses and activities enjoy an implied exemption from antitrust laws?

A) railroads
B) agricultural cooperatives
C) airlines
D) labor unions

Question 49

The ________ is a defense that can be raised even if the merger would otherwise violate Section 7 of the Clayton Act.

A) small company doctrine
B) Noerr doctrine
C) conscious parallelism doctrine
D) Colgate doctrine

Question 50

A merger between two regional fruit-sellers that do not sell fruit in the same geographical area is an example of a ________.

A) market extension merger
B) conglomerate merger
C) horizontal merger
D) vertical merger

Question 51

Which of the following describes backward vertical merger?

A) a vertical merger between two or more companies that compete in the same business and geographical market
B) a vertical merger between two companies in similar fields whose sales do not overlap
C) a vertical merger in which a supplier acquires a customer
D) a vertical merger in which a customer acquires a supplier

Question 52

Which of the following describes a vertical merger?

A) a merger between firms in totally unrelated businesses
B) a merger that integrates the operations of a supplier and a customer
C) a merger between two companies in similar fields whose sales do not overlap
D) a merger between two or more companies that compete in the same business and geographical market

Question 53

________ prohibits unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce.

A) Section 2(b) of the Robinson-Patman Act
B) Section 5 of the Federal Trade Commission Act
C) Section 3 of the Clayton Act
D) Section 2 of the Clayton Act

Question 54

A merger where a chain of coffeehouse stores acquires a coffee plantation is an example of a ________.

A) backward vertical merger
B) forward vertical merger
C) market extension merger
D) conglomerate merger

Question 55

The unfair advantage theory applies to ________ mergers.

A) horizontal
B) market extension
C) conglomerate
D) vertical

Question 56

The ________ is a federal statute,enacted in 1914,that regulates mergers and prohibits certain exclusive dealing arrangements.

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

Question 57

A large multinational organization discontinues its clothing manufacturing business and subsequently lowers the prices of all clothing goods manufactured by it.In this instance,the organization can claim the ________ defense to price discrimination.

A) cost justification
B) changing conditions
C) meeting the competition
D) implied exemptions

Question 58

Which of the following is true of horizontal mergers?

A) They do not create an increase in market share.
B) They result in an increase in concentration of the relevant market.
C) The merging firms serve different markets.
D) They are mergers between firms in unrelated businesses.

Question 59

The ________ requires certain firms to notify the Federal Trade Commission and the Justice Department in advance of a proposed merger and comply with a thirty-day waiting period before the merger is approved.

A) Celler-Kefauver Act
B) Hart-Scott-Rodino Antitrust Improvement Act
C) Robinson-Patman Act
D) Sherman Act

Question 60

Which of the following is true of vertical mergers?

A) They do not create an increase in market share.
B) They may expand the acquiring firm's product market.
C) They are mergers between firms in unrelated businesses.
D) The merging firms serve identical markets.

Question 61

A horizontal restraint of trade occurs when two or more competitors at different levels of distribution enter into a contract to restrain trade.

Question 62

Vertical mergers do not create an increase in a company's market share because the merging firms serve different markets.

Question 63

A horizontal merger is a merger that integrates the operations of a supplier and a customer.

Question 64

Predatory pricing that is intended to drive out competition has been held to violate Section 2 of the Sherman Act.

Question 65

A unilateral refusal to deal is a violation of Section 1 of the Sherman Act.

Question 66

Only the Federal Trade Commission (FTC)can obtain an injunction under the FTC Act.

Question 67

The setting of minimum resale prices is not a per se violation of Section 1 of the Sherman Act.

Question 68

A group boycott occurs when two or more parties on different levels of distribution enter into a contract,combination,or conspiracy to restrain trade.

Question 69

A market extension merger is a merger between two companies in similar fields whose sales overlap.

Question 70

The Celler-Kefauver Act widened the scope of Section 7 of the Clayton Act to include asset acquisitions.

Question 71

The government may seek civil damages,but not treble damages,for violations of antitrust laws.

Question 72

The Clayton Act is the only major antitrust act that includes criminal sanctions.

Question 73

If two competing manufacturers of a similar product both separately reach an independent decision not to deal with a retailer,it is a violation of Section 1 of the Sherman Act.

Question 74

The unfair advantage is intended to prevent wealthy companies from overwhelming the competition in a given market.

Question 75

Firms that attempt or conspire to monopolize a relevant market may be found liable under Section 2 of the Sherman Act.

Question 76

Antitrust laws are enacted to limit anticompetitive behavior.

Question 77

Price fixing includes stabilizing the price of a commodity or service.

Question 78

Determining the line of commerce that will be affected by a merger involves defining the relevant product or service market.

Question 79

If two products are substitutes for each other,they are not considered part of the same line of commerce.

Question 80

Only actual damages,not treble damages,may be recovered for violations of the FTC Act.