Question 1

The __________ concludes that market forces defeat most anticompetitive practices.

Accepted Answer

A)  Chicago School 
B)  Antitrust School 
C)  Contra-antitrust School 
D)  Economic Forecasting Model 
A)  Chicago School 
B)  Antitrust School 
C)  Contra-antitrust School 
D)  Economic Forecasting Model

Question 2

Which of the following is true regarding conscious parallelism?

Accepted Answer

A)  Proof, standing alone, that firms changed prices at the same time is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms initially set prices at the same levels. 
B)  Proof, standing alone, that firms initially set prices at the same levels is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms later changed prices at the same time. 
C)  Showing that firms consistently set prices at the same levels and change prices at the same time is sufficient to prove a horizontal conspiracy to set prices. 
D)  Merely showing that firms consistently set prices at the same levels and change prices at the same time is insufficient to prove a horizontal conspiracy to set prices. 
A)  Proof, standing alone, that firms changed prices at the same time is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms initially set prices at the same levels. 
B)  Proof, standing alone, that firms initially set prices at the same levels is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms later changed prices at the same time. 
C)  Showing that firms consistently set prices at the same levels and change prices at the same time is sufficient to prove a horizontal conspiracy to set prices. 
D)  Merely showing that firms consistently set prices at the same levels and change prices at the same time is insufficient to prove a horizontal conspiracy to set prices.

Question 3

Local municipalities may not be held liable for antitrust damages and are not subject to equitable remedies such as injunctions.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the basic U.S.rule for evaluating whether monopolistic action under the Sherman Act is violated by acts affecting U.S.imports where the anticompetitive conduct occurs offshore,but the adverse impact is felt in the United States. When,if ever,is conflicting law between a foreign country and the U.S.a defense?

Accepted Answer

The Sherman Act will apply to conduct by

Question 5

In order to find a violation of the Sherman Act,courts require evidence of an explicit agreement to violate the law.

Accepted Answer

A) True 
 B)False

Question 6

The Robinson-Patman Act prohibits

Accepted Answer

A)  certain price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition. 
A)  certain price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition.

Question 7

Even when a U.S.court finds a foreign corporation in violation of the antitrust laws,any award of damages is meaningless without foreign enforcement of the award unless the foreign corporation has assets in the U.S.that can be attached to satisfy the judgment.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following refers to the principle that unless barriers to entry or other factors make a market structurally conducive to monopolization,pricing below cost is not a Sherman Act violation,regardless of whether the defendant had monopolistic intent?

Accepted Answer

A)  The principle of certainty 
B)  The principle of uncertainty 
C)  The rule of improbability 
D)  The rule of impossibility 
A)  The principle of certainty 
B)  The principle of uncertainty 
C)  The rule of improbability 
D)  The rule of impossibility

Question 9

Section 7 of the Clayton Act prohibits

Accepted Answer

A)  price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition. 
A)  price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition.

Question 10

Without further inquiry,boycotts are per se illegal under the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 11

Section 5 of the Federal Trade Commission Act is broader than the other antitrust laws.

Accepted Answer

A) True 
 B)False

Question 12

Under which of the following situations will courts usually find pricing legal?

Accepted Answer

A)  When the prices are above average variable cost but below average total cost and the company has excess capacity. 
B)  When the prices are above average variable cost but below average total cost and the company does not have excess capacity. 
C)  When the prices are below average variable cost and below average total cost and the company does not have excess capacity. 
D)  Only when prices are above both average variable cost and average total cost. 
A)  When the prices are above average variable cost but below average total cost and the company has excess capacity. 
B)  When the prices are above average variable cost but below average total cost and the company does not have excess capacity. 
C)  When the prices are below average variable cost and below average total cost and the company does not have excess capacity. 
D)  Only when prices are above both average variable cost and average total cost.

Question 13

Section 2 of the Sherman Act prohibits

Accepted Answer

A)  price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition. 
A)  price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition.

Question 14

Horizontal price-fixing,such as an agreement between retailers to set a common price for a product,is the classic example of a(n)________ violation of Section 1 of the Sherman Act.

Accepted Answer

A)  per se 
B)  Intentional 
C)  rule of reason 
D)  willful 
A)  per se 
B)  Intentional 
C)  rule of reason 
D)  willful

Question 15

Happy City has three distributors of milk products. Sam,who owns a grocery store,angers one of the distributors when he insists that additional milk be delivered on Christmas Eve. He annoys another distributor when he makes a delivery driver wait to deliver milk. The three distributors get together and discuss the fact that they like all the other grocers in town better than Sam. One of them has an idea that they should stop selling milk products to Sam. The milk distributors call their friends the meat distributors and talk them into not selling meat to Sam either. Sam hears about the plot and wants to stop it. Which of the following best describes the agreements between the distributors of milk and meat to not sell to Sam?

Accepted Answer

A)  It would likely be a boycott 
B)  It would likely be a horizontal distribution agreement 
C)  It would likely be a vertical distribution agreement 
D)  There is no descriptive term in antitrust law since this is simply an agreement among sellers who do not legally have to sell to any particular buyer. 
A)  It would likely be a boycott 
B)  It would likely be a horizontal distribution agreement 
C)  It would likely be a vertical distribution agreement 
D)  There is no descriptive term in antitrust law since this is simply an agreement among sellers who do not legally have to sell to any particular buyer.

Question 16

Which of the following is the objective of the rule of reason rule?

Accepted Answer

A)  To determine whether the requirements of the per se rule have been satisfied. 
B)  To determine whether, on balance, the activity at issue promotes or restrains competition. 
C)  To determine whether in a particular situation a horizontal price fixing has actually harmed consumers. 
D)  To determine if providers of a good acted reasonably in engaging in a boycott. 
A)  To determine whether the requirements of the per se rule have been satisfied. 
B)  To determine whether, on balance, the activity at issue promotes or restrains competition. 
C)  To determine whether in a particular situation a horizontal price fixing has actually harmed consumers. 
D)  To determine if providers of a good acted reasonably in engaging in a boycott.

Question 17

If a manufacturer of television sets acquires a magazine publisher,it will be a

Accepted Answer

A)  vertical merger 
B)  horizontal merger 
C)  conglomerate merger 
D)  product-line 
A)  vertical merger 
B)  horizontal merger 
C)  conglomerate merger 
D)  product-line

Question 18

Which of the following is an approach to analyzing the reasonableness of a restraint of trade?

Accepted Answer

A)  Totality rule 
B)  Per se rule 
C)  Rule of reason 
D)  Both the per se rule and the rule of reason 
A)  Totality rule 
B)  Per se rule 
C)  Rule of reason 
D)  Both the per se rule and the rule of reason

Question 19

With a(n)________ distributorship,a manufacturer limits itself to a single distributor in a given territory.

Accepted Answer

A)  dual 
B)  exclusive 
C)  franchise 
D)  market-power 
A)  dual 
B)  exclusive 
C)  franchise 
D)  market-power

Question 20

Fact Pattern 16-1
Patty owns and operates a gym. Her main competitor is Jason who runs another gym three streets from her. They cater to the same clientele. Patty and Jason keep trying to undercut each other in order to attract customers. One evening Patty sees Jason in the local coffee shop and sits down to talk with him. They discuss how difficult it is to do upgrades and make money with the prices they are charging. Patty winked at Jason and said "You know, charging $80 per month would enable a good profit margin." The next day Patty started charging $80 per month as did Jason. Customers started complaining particularly after another coffee drinker and gym customer at a table sitting at a table near Patty and Jason made it known that they had seemed very cozy. Patty and Jason deny any agreement to set the same price for gym membership. They avow that the decision was made by each of them independently.
-Refer to fact pattern 16-1. Frank,a first year law student and gym member,is suspicious; but he does not know what violation to claim. Which of the following is the correct term for an illegal agreement by providers of the same good or service to charge a set fee?

Accepted Answer

A)  Horizontal price fixing 
B)  Vertical price fixing 
C)  Substantial price fixing 
D)  Predatory price fixing 
A)  Horizontal price fixing 
B)  Vertical price fixing 
C)  Substantial price fixing 
D)  Predatory price fixing

Exam 16: Antitrust

The __________ concludes that market forces defeat most anticompetitive practices.

Which of the following is true regarding conscious parallelism?

Local municipalities may not be held liable for antitrust damages and are not subject to equitable remedies such as injunctions.

In order to find a violation of the Sherman Act,courts require evidence of an explicit agreement to violate the law.

The Robinson-Patman Act prohibits

Even when a U.S.court finds a foreign corporation in violation of the antitrust laws,any award of damages is meaningless without foreign enforcement of the award unless the foreign corporation has assets in the U.S.that can be attached to satisfy the judgment.

Which of the following refers to the principle that unless barriers to entry or other factors make a market structurally conducive to monopolization,pricing below cost is not a Sherman Act violation,regardless of whether the defendant had monopolistic intent?

Section 7 of the Clayton Act prohibits

Without further inquiry,boycotts are per se illegal under the Sherman Act.

Section 5 of the Federal Trade Commission Act is broader than the other antitrust laws.

Under which of the following situations will courts usually find pricing legal?

Section 2 of the Sherman Act prohibits

Horizontal price-fixing,such as an agreement between retailers to set a common price for a product,is the classic example of a(n)________ violation of Section 1 of the Sherman Act.

Which of the following is the objective of the rule of reason rule?

If a manufacturer of television sets acquires a magazine publisher,it will be a

Which of the following is an approach to analyzing the reasonableness of a restraint of trade?

With a(n)________ distributorship,a manufacturer limits itself to a single distributor in a given territory.

law, value creation, and risk management

Ethics ant the law

Courts, sources of law, and dispute resolution

Constitutional bases for business regulation

Agency

Administrative Law

Contracts

sales,licensing,and e-commerce

Torts and Privacy protection

product liability

Intellectual property

The employment agreement

civil rights and employment discrimination

Criminal law

Environmental law

Consumer Protection

real property and land use

Forms of business organizations

Directors, Officers, and Controlling Shareholders

Public and Private Offerings of Securities

Securities Fraud and insider trading

Debtor-Creditor Relations and Bankruptcy

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