Deck 20: Antitrust Law

Question 1

The sponsors of the Sherman Antitrust Act saw it as:

A)a way to increase private investment in big business
B)a way to maintain industry dominance by a few efficient firms in each industry
C)a way to increase tax revenue from big businesses
D)a way to lessen the tax burden on small businesses
E)none of the other choices are correct

Answer 1

E

Question 2

The Clayton Act,the Sherman Act and the Federal Trade Commission Act are all examples of:

A)state antitrust legislation
B)federal antidiscrimination legislation
C)federal employment legislation
D)state employment legislation
E)none of the other choices are correct

Answer 2

E

Question 3

The Sherman Act expressly holds illegal:

A)contracts and combinations in restraint of trade
B)discrimination in prices between different purchasers of commodities of like grade and quality
C)a business that raises its prices,where the effect may be to lessen competition
D)contracts and combinations in restraint of trade;discrimination in prices between different purchasers of commodities of like grade and quality
E)contracts and combinations in restraint of trade;discrimination in prices between different purchasers of commodities of like grade and quality;and a business that raises its prices,where the effect may be to lessen competition

Answer 3

A

Question 4

Which of the following is not an antitrust statute:

A)the Clayton Act
B)the Federal Trade Commission Act
C)the Sherman Act
D)the Interstate Commerce Act
E)all of the other choices are antitrust statutes

Question 5

Unpopularity of large businesses helped lead to passage of the ___________ in 1890.

A)Clayton Act
B)Business Regulation Act
C)Monopoly Act
D)Federal Trade Commission Act
E)none of the other choices are correct

Question 6

The word "antitrust" in the Sherman Antitrust Act comes from:

A)Rockefeller's Standard Oil,which was organized as a trust
B)Rockefeller's untrustworthy nature
C)the lack of trust people felt towards large businesses
D)the government's position towards big businesses
E)the tendency for big businesses to engage in untrustworthy practices

Question 7

Which of the following is a provision of the Sherman Act:

A)unfair methods of competition in or affecting commerce...are...unlawful
B)it shall be unlawful for any person engaged in commerce...to discriminate in prices between purchasers of commodities of like grade and quality
C)no corporation...shall acquire...another corporation...where...the effect of such acquisition may be substantially to lessen competition,or to tend to create a monopoly
D)every contract,combination...or conspiracy,in restraint of trade...is illegal
E)none of the other choices are a part of the Sherman Act

Question 8

The Sherman Act expressly holds illegal:

A)a business that grows so large that it dominates a market
B)discrimination in prices between different purchasers of commodities of like grade and quality
C)a business that raises its prices,where the effect may be to lessen competition
D)all of the other specific choices
E)none of the other choices

Question 9

A key motive behind the Sherman Act was:

A)concern over the undue influence banks had over Congress
B)Congressional concern to limit competition faced by U.S.agricultural producers
C)concern that businesses were too influential in state legislatures
D)unpopularity of large businesses organizations
E)a desire to end import tariffs

Question 10

The Clayton Act,the Sherman Act and the Federal Trade Commission Act are all examples of:

A)state antitrust legislation
B)federal antitrust legislation
C)federal employment legislation
D)state employment legislation
E)federal antidiscrimination legislation

Question 11

The first antitrust statute enacted by Congress (in 1890)was:

A)the Federal Trade Commission Act
B)the Interstate Commerce Act
C)the Sherman Act
D)the Clayton Act
E)the Norris-LaGuardia Act

Question 12

Unpopularity of large businesses helped lead to passage of the ___________ in 1890.

A)Clayton Act
B)Business Regulation Act
C)Sherman Antitrust Act
D)Federal Trade Commission Act
E)Monopoly Act

Question 13

The first antitrust statute enacted by Congress (in 1890)was:

A)the Federal Trade Commission Act
B)the Interstate Commerce Act
C)the Norris-LaGuardia Act
D)the Clayton Act
E)none of the other choices

Question 14

A key motive behind the Sherman Act was:

A)concern over the undue influence banks had over Congress
B)concern about competition faced by U.S.agricultural producers
C)concern that businesses were too influential in state legislatures
D)a desire to end import tariffs
E)none of the other choices

Question 15

The sponsors of the Sherman Antitrust Act saw it as:

A)a way to reduce concerns that some industries were dominated by a few firms
B)a way to maintain industry dominance by a few efficient firms in each industry
C)a way to increase tax revenue from big businesses
D)a way to lessen the tax burden on small businesses
E)a way to increase private investment in big business

Question 16

The word "antitrust" in the Sherman Antitrust Act comes from:

A)the tendency for big businesses to engage in untrustworthy practices
B)Rockefeller's untrustworthy business practices
C)the lack of trust people felt towards large businesses
D)the government's position towards big businesses
E)none of the other choices are correct

Question 17

Which of the following is an antitrust statute:

A)the Clayton Act
B)the Federal Trade Commission Act
C)the Sherman Act
D)the Federal Trade Commission Act and the Sherman Act
E)the Federal Trade Commission Act and the Sherman Act and the Clayton Act

Question 18

Antitrust law refers to:

A)the interpretation of antitrust statues by the courts
B)the antitrust statutes
C)the enforcement policies of administrative agencies
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 19

Which of the following led to the passage of federal antitrust legislation:

A)the growth of large corporations in the late 19ᵗʰ century
B)the decline of large corporations in the early 19ᵗʰ century
C)the growth of large corporations in the late 18ᵗʰ century
D)the Industrial Revolution
E)the Great Depression

Question 20

Which of the following is a provision of the Sherman Act:

A)unfair methods of competition in or affecting commerce...are...unlawful
B)it shall be unlawful for any person engaged in commerce...to discriminate in prices between purchasers of commodities of like grade and quality
C)no corporation...shall acquire...another corporation...where...the effect of such acquisition may be substantially to lessen competition,or to tend to create a monopoly
D)all of the other choices are parts of the Act
E)none of the other choices are parts of the Act

Question 21

The Clayton Act does not clearly restrict which of the following?

A)unfair methods of competition
B)tying arrangements
C)mergers found to substantially lessen competition
D)interlocking directorates
E)all of the other choices are restricted

Question 22

Which law holds "unfair methods of competition" to be illegal?

A)the Sherman Act
B)the Clayton Act
C)the Federal Trade Commission Act
D)the Antitrust Improvement Act
E)none of the other choices

Question 23

Price discrimination in the sale of goods in restricted by the:

A)Sherman Antitrust Act
B)Price Discrimination Act
C)Robinson-Patman Act
D)Johnson Act
E)Fair Trade and Commerce Act

Question 24

If Coca-Cola were to want to merge with Pepsi,and this was held to "substantially lessen competition" or "tend to create a monopoly," that would be a violation of:

A)the FTC Act
B)the Clayton Act
C)the Sherman Act
D)all of the other specific choices
E)none of the other choices

Question 25

The Clayton Act holds illegal:

A)"overly vigorous" methods of competition
B)certain forms of price discrimination
C)tying sales that create a monopoly
D)certain forms of price discrimination and tying sales that create a monopoly
E)certain forms of price discrimination and tying sales that create a monopoly and "overly vigorous" methods of competition

Question 26

If Coca-Cola were to want to merge with Pepsi,and this was held to "substantially lessen competition" or "tend to create a monopoly," that would be a violation of:

A)Section 5 of the FTC Act
B)Section 2 of the Clayton Act
C)Section 3 of the Clayton Act
D)Section 7 of the Clayton Act
E)none of the other choices

Question 27

The Clayton Act is intended to:

A)limit fluctuations in the stock market
B)deal with established monopolies
C)increase the ability of firms to develop monopolies
D)force higher taxes on monopolies
E)none of the other choices are correct

Question 28

Unfair methods of competition are held to be illegal under:

A)the Sherman Act
B)the Clayton Act
C)the Federal Trade Commission Act
D)the Antitrust Improvement Act
E)none of the other choices

Question 29

The Clayton Act was passed to:

A)deal with the problem of state interference in a federal issue
B)add restrictions beyond the Sherman Act
C)show Congressional dislike of free trade
D)deal with price fixing by the Standard Oil Trust
E)try to limit dangerous fluctuations in the stock market

Question 30

The Clayton Act prevents a corporation from acquiring another corporation if:

A)the result is that it may substantially lessen competition
B)consumers are not informed of the acquisition
C)wholesalers who supply the competitors cannot continue to sell goods to separate buyers
D)the corporations are in identical lines of commerce
E)all of the other choices

Question 31

Exclusive dealing is when:

A)a company is forbidden from dealing with other possible buyers or sellers
B)a company is forbidden from dealing with other possible buyers,but is free to work with other possible sellers
C)a company is forbidden from dealing with other possible sellers,but is free to work with other possible buyers
D)a company chooses to only use one supplier
E)a company only sells to one customer

Question 32

There is no exact definition of a monopoly,but in general a monopoly:

A)a firm does not have to pay any federal taxes
B)one firm makes a better product than others in the same market
C)consumers prefer one firm over all others
D)one firm has more than 30% of the market share for a certain product
E)none of the other choices are correct

Question 33

The Clayton Act restricts which of the following?

A)exclusive dealing arrangements
B)tying arrangements
C)mergers found to substantially lessen competition
D)interlocking directorates
E)all of the other choices

Question 34

The Clayton Act is intended to:

A)stop a business practice early in use to prevent a firm becoming a monopoly
B)deal with established monopolies that were expanding their influence
C)increase the ability of firms to develop monopolies
D)force higher taxes on monopolies
E)limit fluctuations in the stock market caused by monopolistic practices

Question 35

Tying sales is when:

A)the sale of one good is independent of another
B)the sale of one good is tied to the sale of another
C)the sale of one good is delayed by the production of another good
D)the sale of one good depends on the production of another good
E)none of the other choices are correct

Question 36

The Federal Trade Commission Act was enacted by Congress in:

A)1890
B)1900
C)1914
D)1945
E)1960

Question 37

There is no exact definition of a monopoly,but in general a monopoly:

A)exists when one or a few firms dominate the sales of a product or service
B)one firm makes a better product than others in the same market
C)consumers prefer one firm over all others
D)one firm has more than 30% of the market share for a certain product
E)a firm does not have to pay any federal taxes

Question 38

The Clayton Act was enacted in:

A)1890
B)1900
C)1914
D)1920
E)1930

Question 39

The Clayton Act prevents a corporation from acquiring another corporation if:

A)the Department of Commerce does not approve
B)consumers are not informed of the acquisition
C)wholesalers who supply the competitors cannot continue to sell goods to separate buyers
D)the corporations are in identical lines of commerce
E)none of the other choices

Question 40

The Clayton Act was passed to:

A)deal with the problem of state interference in a federal issue
B)try to limit dangerous fluctuations in the stock market
C)show Congressional dislike of free trade
D)deal with price fixing by the Standard Oil Trust
E)none of the other choices

Question 41

Which of the following has the right to sue for violation of antitrust laws:

A)a private individual
B)a small business
C)a big business
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 42

A company injured by an act that violates the Sherman Act may sue for only:

A)punitive and actual money damages
B)actual money damages
C)damages incurred in the "ordinary course of business"
D)no damages;only the government can sue to enforce the law
E)none of the other choices

Question 43

Which of the following organizations are at least partly exempt from the antitrust laws?

A)lobbyists
B)U.S.auto producers
C)cell phone companies
D)all of the other specific choices
E)none of the other choices are exempt

Question 44

Which of the following is not permitted as a possible remedy in antitrust actions?

A)force a company to sell a subsidiary
B)force a company to let other use its patents
C)restrain a company from certain business conduct
D)force a company to create a new company to compete with it
E)all of the other choices are permitted

Question 45

Even if the purpose is anticompetitive,lobbying to influence a legislature is not illegal because:

A)the First Amendment gives persons the right to petition their government
B)the Fifth Amendment gives persons the right to petition their government
C)the right is protected by the McCarran-Ferguson Act
D)the Sherman Antitrust Act allows any kind of lobbying
E)none of the other choices are correct

Question 46

A private party that wins treble damages for a violation of the Sherman Act will receive:

A)twice their actual money damages
B)twice their actual money damages plus court costs and attorney fees
C)three times their actual money damages plus court costs and attorney fees
D)court fees and attorney fees
E)half their actual money damages plus court costs and attorney fees

Question 47

Which of the following may be at least partly exempt from antitrust laws?

A)agricultural cooperatives
B)insurance firms regulated by the states
C)a group of domestic producers who band together to sell exports
D)all of the other specific choices
E)none of the other choices

Question 48

A company injured by an act that violates the Sherman Act may sue for:

A)punitive damages and actual money damages
B)actual money damages
C)damages incurred in the "ordinary course of business"
D)three times actual money damages
E)no damages;only the government can sue to enforce the law

Question 49

The Export Trading Company Act:

A)allows sellers exporting goods to evade taxes
B)prevents sellers exporting goods from evading taxes
C)allows sellers of exports to receive limited antitrust immunity
D)prevents sellers of exports from engaging in any unfair practices
E)none of the other choices are correct

Question 50

Violations of Sections 1 and 2 of the Sherman Act by a corporation can result in:

A)up to 50 years in prison
B)a fine of $1 million
C)a fine of $100 million
D)both a and b are correct
E)both a and c are correct

Question 51

The insurance industry is exempted from federal antitrust laws by the:

A)Parker doctrine
B)state action doctrine
C)McCarran-Ferguson Act
D)Noerr-Pennington doctrine
E)National Insurance Act

Question 52

The antitrust laws may be enforced by:

A)the Federal Trade Commission (FTC)
B)the Department of Justice
C)private parties
D)the FTC and Department of Justice
E)the FTC and Department of Justice and private parties

Question 53

The FTC has the authority to do which of the following:

A)investigate suspect business dealings
B)hold hearings instead of trials
C)issue administrative orders that require parties to stop certain business acts
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 54

Which of the following organizations are at least partly exempt from the antitrust laws?

A)lobbyists
B)labor unions
C)insurance companies
D)all of the other specific choices
E)none of the other choices

Question 55

Which of the following may be at least partly exempt from antitrust laws?

A)agricultural cooperatives
B)insurance firms regulated by the states
C)the medical profession
D)agricultural cooperatives and insurance firms regulated by the states
E)agricultural cooperatives and insurance firms regulated by the states and the medical profession

Question 56

Violations of Sections 1 and 2 of the Sherman Act by an individual can result in:

A)up to 10 years in prison
B)a fine of $1 million
C)a fine of $5 million
D)both a and b are correct
E)both a and c are correct

Question 57

Under the _____________,lobbying to influence a legislature is not illegal,even if the purpose is anticompetitive.

A)Parker doctrine
B)state action doctrine
C)McCarran-Ferguson Act
D)Noerr-Pennington doctrine
E)National Insurance Act

Question 58

Which antitrust statute carries the most severe penalties?

A)Federal Trade Commission Act
B)Clayton Act
C)Sherman Act
D)Interstate Commerce Act
E)the penalties may be the same for all

Question 59

Violations of the Sherman Act can result in:

A)criminal convictions with prison time
B)treble damages plus attorney fees paid by the loser
C)an injunction ordering a defendant to stop some activities
D)treble damages plus attorney fees paid by the loser and an injunction ordering a defendant to stop some activities
E)treble damages plus attorney fees paid by the loser and an injunction ordering a defendant to stop some activities and criminal convictions with prison time

Question 60

An action to stop business activities that appears to violate the Sherman or Clayton Act can be brought:

A)by a private plaintiff who has been harmed
B)by the government
C)by the Antitrust Task Force
D)by a private plaintiff who has been harmed or by the government
E)by a private plaintiff who has been harmed or by the government or by the Antitrust Task Force

Question 61

A(n)______________ means that that certain business agreements or activities will automatically be held to be illegal if found to exist.

A)rule of reason
B)per se rule
C)terminal rule
D)antitrust rule
E)firm rule

Question 62

The courts use the rule of reason to decide many antitrust cases because:

A)the courts consider the facts surrounding a case to decide if a practice hurts or helps competition
B)it is reasonable to compare a case being tried to a previous case and use the decision from that case
C)the courts would rather use the rule of reason than go through a detailed economic analysis
D)all practices attacked under antitrust laws are anti-competitive and thus prohibited
E)none of the other choices

Question 63

Antitrust law restricting monopolization favors competition because:

A)it lowers prices for consumers
B)it spurs companies to innovate
C)it increases consumer choice
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 64

A ______________ means that the court looks at the facts surrounding business practice before deciding whether it helps or hurts competition.

A)per se rule
B)golden rule
C)rule of reasonableness
D)rule of thoughtfulness
E)none of the other choices are correct

Question 65

Which of the following is a factor that the a court considers when using the rule of reason in antitrust cases:

A)the business reasons for the restraint
B)the restraining business's position in its industry
C)the structure of the industry
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 66

The classic example of a per se violation of antitrust law is:

A)two companies agreeing to stop buying from a third company
B)a group of competitors deciding to outsource all manufacturing overseas
C)a group of 5 or more competitors agreeing to use the same supplier so they can buy things in bulk and get better prices
D)a group of competitors agreeing on the prices they will charge for their goods so as to eliminate price competition
E)none of the other choices are correct

Question 67

Which of the following is not permitted as a possible remedy in antitrust actions?

A)force a company to sell a subsidiary
B)force a company to let other use its patents
C)force a company to buy another company
D)force a company to create a new company to compete with it
E)all of the other choices are permitted

Question 68

Which of the following statements about the per se rule and the rule of reason antitrust doctrines is true?

A)under rule of reason,only proof of an antitrust violation is needed for the courts to rule the firm violates antitrust laws
B)under per se,the court rule that a certain business practice being committed is automatically illegal
C)under rule of reason,the court consider the impact of a business practice to determine if it is harmful to competition
D)under per se,if precedent found a business action to be illegal,it always remains illegal
E)none of the other choices

Question 69

When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

A)declaring the practice illegal per se
B)declaring the practice legal per se
C)using the rule of reason
D)rejecting the rule of reason
E)ignoring Congressional purpose behind the antitrust laws

Question 70

The courts use the rule of reason to decide many antitrust cases because:

A)the Clayton Act requires a rule of reason analysis be used
B)it is reasonable to compare a case being tried to a previous case and use the decision from that case
C)the courts would rather use the rule of reason than go through a detailed economic analysis
D)all practices attacked under antitrust laws are anti-competitive and thus prohibited
E)none of the other choices

Question 71

Which of the following is NOT restricted by antitrust law:

A)unfair business practices
B)monopolies
C)the size of firms
D)business practices that can lead to a monopoly
E)all of the other choices are restricted by antitrust law

Question 72

Which of the following is a possible remedy to an antitrust suit brought by the government:

A)restrain a company from certain conduct
B)force a company to sell part of its assets
C)force a company to let other use its patents
D)all of the other specific choices are correct
E)none of the other specific choices are correct

Question 73

Which of the following is a possible remedy to an antitrust suit brought by a private plaintiff:

A)restrain a company from certain conduct
B)force a company to sell part of its assets
C)force a company to let other use its patents
D)cancel existing business contracts
E)all of the other specific choices are correct

Question 74

The cases concerning monopolization indicate:

A)a concern with protecting competitors
B)a desire to restrict the size of firms
C)protecting competition itself
D)the per se rule generally applies
E)none of the other choices

Question 75

Which of the following statements about the per se rule and the rule of reason antitrust doctrines is true?

A)under rule of reason,only proof of an antitrust violation is needed for the courts to rule the firm violates antitrust laws
B)under per se,the court rules that the actions of the firm are not justified given the weight of the evidence
C)under rule of reason,the court consider the impact of a business practice to determine if it is harmful to competition
D)under per se,if precedent found a business action to be illegal it always remains illegal
E)none of the other choices

Question 76

A(n)______________ means that that certain business agreements or activities will automatically be held to be illegal if found to exist.

A)rule of reason
B)firm rule
C)terminal rule
D)antitrust rule
E)none of the other choices are correct

Question 77

Which of the following statements about the per se rule and the rule of reason antitrust doctrines is true?

A)under rule of reason,only proof of an antitrust violation is needed for the courts to rule the firm violates antitrust laws
B)under per se,the court rules that the actions of the firm are not justified given the weight of the evidence
C)under rule of reason,the court rules that any violation of antitrust legislation is illegal
D)under per se,if precedent found a business action to be illegal it always remains illegal
E)none of the other choices

Question 78

A ______________ means that the court looks at the facts surrounding business practice before deciding whether it helps or hurts competition.

A)per se rule
B)rule of reason
C)rule of reasonableness
D)rule of thoughtfulness
E)golden rule

Question 79

When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

A)declaring the practice illegal per se
B)declaring the practice legal per se
C)ignoring Congressional purpose behind the antitrust laws
D)rejecting the rule of reason
E)none of the other choices

Question 80

To recover damages under antitrust law,plaintiffs must have:

A)suffered injury due to anticompetitive behaviors of the defendant
B)lost money in a business deal
C)have less than a 30% market share in any product or service they sell
D)suffered losses due to the defendant's successes
E)none of the other choices are correct