Deck 46: Antitrust Law and Unfair Trade Practices

Question 1

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 Antitrust Act

Answer 1

D

Question 2

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

Answer 2

A

Question 3

The Clayton Act, enacted in 1914, regulates mergers and prohibits certain exclusive dealing arrangements.

Answer 3

True

Question 4

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

Question 5

Government enforcement of antitrust laws is divided between the ________ and the ________.

A) the Sherman Antitrust Act; Clayton Antitrust Act
B) Antitrust Division of the Department of Justice; Clayton Antitrust Act
C) Antitrust Division of the Department of Justice; Bureau of Competition of the Federal Trade Commission
D) Sherman Antitrust Act; Bureau of Competition of the Federal Trade Commission

Question 6

The antitrust laws were enacted to promote anticompetitive behavior in commerce and industry.

Question 7

The FTC Act can be used to recover treble damages.

Question 8

Which of the following is true of antitrust laws?

A) Antitrust laws are fixed and unchangeable.
B) Antitrust laws were enacted by Congress as early as the late 1800s.
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 9

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

Question 10

Antitrust defendants often opt to settle government-brought antitrust actions by entering a plea of nolo contendere.

Question 11

Federal antitrust laws provide only for government lawsuits.

Question 12

Private parties cannot intervene in public antitrust actions brought by the government.

Question 13

The Robinson-Patman Act is a federal statute that makes it mandatory to provide a notification prior to a merger.

Question 14

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

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

Question 15

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 16

Antitrust laws are constant across changes in governmental administration.

Question 17

Treble damages cannot be sought by the government for the violation of antitrust laws.

Question 18

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 Antitrust Act

Question 19

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 20

________ 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 21

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 referred to as ________.

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

Question 22

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

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

Question 23

Which of the following is true with regard to price fixing?

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

Question 24

Give an account of state antitrust laws.

Question 25

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 26

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

Question 27

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 28

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 29

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 30

________ 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 31

Which of the following horizontal restraints of trade has the element of monopoly in it?

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

Question 32

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 33

________ is seen when an independent choice is made by one party not to deal with another party.

A) Nonprice vertical restraint
B) Monopoly to deal
C) Unilateral refusal to deal
D) Conscious parallelism

Question 34

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

A) fails to permit any defenses and justifications to save the restraint of trade
B) applies only to restraints that are found to be unreasonable with certain evidentiary standards being met
C) applies to restraints that are based primarily on the firm's market share and power
D) requires a balancing of the positive and negative effects of the challenged restraint

Question 35

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 36

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 37

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

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

Question 38

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 39

Which of the following is an example of a vertical restraint of trade?

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

Question 40

________ is when two or more competitors at the same level of distribution enter into a contract, combination, or conspiracy to restrain trade

A) Horizontal price fixing
B) Horizontal restraint of trade
C) Unilateral refusal to deal
D) Conscious parallelism

Question 41

Setting of minimum resale prices is a rule of reason violation of Section 1 of the Sherman Act.

Question 42

A unilateral refusal to deal is a violation of Section 1 of the Sherman Act because there is a concerted action with others.

Question 43

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

A) the Noerr doctrine
B) natural monopoly
C) conscious parallelism
D) predatory pricing

Question 44

Only price-fixing conducted by sellers is considered a violation of Section 1 of the Sherman Act.

Question 45

________ 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 46

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

Question 47

Group boycotts can be either a per se violation or rule of reason violation.

Question 48

The relevant geographical market is always considered state-wide.

Question 49

The per se rule is applicable to restraints of trade that are considered inherently anticompetitive.

Question 50

Noerr doctrine is guaranteed by the Bill of Rights.

Question 51

The fact that price fixing helps consumers or protects competitors from ruinous competition can be used as a valid defense against the charge of price discrimination.

Question 52

Division of markets is considered to be a type of horizontal restraint of trade.

Question 53

The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act is examined by using the rule of reason.

Question 54

For conscious parallelism to be proven, each manufacturer should be found to have acted on its own.

Question 55

Section 2 of the Sherman Act prohibits the act of monopolization.

Question 56

Restraints that are not characterized as per se violations are not further examined using the rule of reason.

Question 57

A monopoly power is characterized by ________.

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

Question 58

Give an account of the Noerr doctrine.

Question 59

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 60

Competitors who agree that each will serve only a designated portion of the market are deemed to be engaging in a group boycott.

Question 61

________ is an act that 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 62

Vertical mergers create an increase in market share because the merging firms serve different markets.

Question 63

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 64

What is 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 65

________ is a defense to Section 2(a) liability, 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 66

The functional interchangeability test is used in defining the relevant product or service market.

Question 67

What is a 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 68

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

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

Question 69

It is necessary to prove actual injury in order for a plaintiff to recover damages in a price discrimination lawsuit.

Question 70

The merger of two grocery store chains that serve the same geographical market is an example of a horizontal merger.

Question 71

Natural monopolies are found to violate Section 2 of the Sherman Act.

Question 72

________ 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 73

Section 1 of the Sherman Act allows for intangible properties to be sold in tying arrangements.

Question 74

________ are mergers between firms in totally unrelated businesses.

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

Question 75

How is a relevant market identified by Section 2 of the Sherman Act?

Question 76

Predatory pricing has been held to violate Section 2 of the Sherman Act.

Question 77

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

Question 78

Which of the following is considered to be a primary defense against Section 7 of the Clayton Act?

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

Question 79

What is a premerger notification? Explain the process outlined by the Hart-Scott-Rodino Antitrust Improvement Act to execute a merger.

Question 80

According to the failing company doctrine, two or more smaller companies are allowed to merge to compete with a larger company even if they are highly profitable as smaller companies.