Exam 23: Government Regulation: Securities and Antitrust

Two universities located within 30 miles of each other agree to divide their market so as to help them both. The two schools draw a line down a map and each university agrees to accept students only on their side of the line. -Such an agreement is:

What is true about insider trading?

The Sherman Act was designed to prevent extreme concentrations of economic power.

Both per se and rule of reason violations of the Sherman Act are automatically illegal.

Which of the following is not an element of a tying agreement under the Clayton Act?

When the per se standard applies,the plaintiff:

Explain horizontal price-fixing and vertical minimum and maximum price-fixing.Discuss their status under antitrust laws.

Resale pricemaintenance (RPM),also called vertical price fixing is not always illegal. It is a rule of reason violation.

The Clayton Act prohibits anti-competitive mergers.

Smalltown has two family-owned hardware stores that have been in business for years.Major Hardware decides that Smalltown would be a good place to build one of its superstores.Major opens,advertising unbelievably low prices; in fact,at below cost.Because Major owns stores nationally,it is able to keep prices extremely low until both of the family-owned stores have to go out of business because they cannot compete.After Major is the only hardware store in town,it raises its prices enough to make up for its former losses and to make some additional profit.Discuss this behavior in relation to antitrust law.

Violations of antitrust law are either per se violations or rule of reason violations.What are the differences between these two types of violations? Give examples of each.

The Foreign Corrupt Practices Act makes it a crime:

Assume that three automobile manufacturers all merged into one car company.Such a merger would be a:

A major motion picture distributor offers to provide a television station with three very popular,desirable films.However,as part of the agreement,the distributor requires that the television station also purchase four films that are not very desirable.This type of arrangement is called a:

A marketing representative who is tempted to engage in price-fixing due to heavy competition and similar prices for competitors' products should:

Companies with substantial assets must notify the FTC before consummating a merger.

Discuss when monopoly power is not a violation of Section 2 of the Sherman Act.

Under what type of securities offering must the issuer determine if the investor is an accredited,sophisticated,or unaccredited investor?

The 1934 Act requires companies with a class of stock that is publicly traded to make regular filings with the SEC.

Gary,Louise,and Brian,who own competing gas stations in town,happen to see each other at a restaurant one morning and have breakfast together.While talking,they decide to set their gas prices at the same amount.They have committed an illegal act only if the agreed price is unfair to consumers.