Deck 28: Answers to the Issue Spotters

Question 1

MetaRay, Inc., and Nucleo Corporation are the only suppliers in their market.They agree to coordinate their production so as to limit output and charge a higher price.Under the Sherman Antitrust Act of 1890, this is

A)a permissible restraint of trade.
B)a prohibited restraint of trade.
C)not a restraint of trade and permitted.
D)not a restraint of trade but prohibited.

Answer 1

B

Question 2

At Global Holdings Inc., the shareholders cast a vote on executive compensaiton for senior executives.Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, this vote is binding on

A)Global's board of directors only.
B)Global's senior executives only.
C)Global's board of directors, senior executives, and shareholders.
D)none of the choices.

Answer 2

D

Question 3

Haruo commits a civil violation of federal securities laws.An enforcement action against Haruo can be brought by

A)the National Securities Markets Agency.
B)the Securities and Exchange Commission.
C)the Securities Enforcement Remedies Administration.
D)the U.S.Department of Justice.

Answer 3

B

Question 4

Deutsche Werke, GmbH., a German firm, is harmed by a price-fixing scheme engineered by Collider Industries, S.A., an international cartel.The European Union is most likely to

A)do nothing.
B)actively pursue Collider and impose criminal penalties.
C)actively pursue Collider and impose civil penalties.
D)contact Collider and issue a reprimand but impose no penalties.

Question 5

Penquin Ltd.agrees with Apple Corporation to use the "agency" model of setting prices and paying commissions on the sales of e-books for iPads.Under this model, publishers

A)agree to sell e-books exclusively through certain "agents."
B)match Amazon.com's e-book prices.
C)price e-books below cost to sell more e-book readers.
D)set their own prices.

Question 6

The U.S.Department of Justice files a suit against Random House, Inc., and other major book publishers, charging that they conspired to fix the prices of e-books.One result of limiting e-book price competition is that consumers

A)pay more for e-books than they otherwise would have paid.
B)pay less for e-books than they otherwise would have paid.
C)have fewer choices of books to buy.
D)have more choices of books to buy.

Question 7

Wiley trades in securities on a regional securities exchange.These trades are subject to regulation by

A)the National Securities Markets Agency.
B)the Securities and Exchange Commission.
C)the Securities Enforcement Remedies Administration.
D)the U.S.Department of Justice.

Question 8

Raoul is a senior executive at Securities Investment Corporation, a U.S.company.Teo is a Securities Investment shareholder.Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, shareholders have the right to vote on executive compensaiton for senior executives at

A)every public U.S.company.
B)every public and private U.S.company.
C)every U.S.company that grants shareholders the right.
D)no U.S.company.

Question 9

Banners, Inc., has the power to control the market for its product.Crest Corporation and Delphic Shield Industries, Inc., agree to limit their competitiveness to increase their profits.The Sherman Antitrust Act of 1890 prohibits restraints on trade and commerce that originate from

A)any lack of balance in the nation's economy.
B)business combinations and conspiracies, and certain monopolistic practices.
C)business combinations and conspiracies only.
D)certain monopolistic practices only.

Question 10

Etoile Metrics, S.A., a French software firm, is harmed by an exclusive-dealing scheme engineered by Flash Search, Inc., a U.S.software firm.Compared to U.S.laws, the European Union's laws

A)define less conduct as anticompetitive.
B)define more conduct as anticompetitive.
C)declare the same conduct-not more or less-to be anticompetitive.
D)include less detailed provisions on monopolization.