Question 1

Which of the following is correct regarding the Clayton Act?

Accepted Answer

A)  It deals with price discrimination, tying contracts, and mergers. 
B)  It added criminal sanctions to the Sherman Act. 
C)  It repealed the Robinson-Patman Act. 
D)  It included labor organizations in its coverage. 
A)  It deals with price discrimination, tying contracts, and mergers. 
B)  It added criminal sanctions to the Sherman Act. 
C)  It repealed the Robinson-Patman Act. 
D)  It included labor organizations in its coverage.

Question 2

The manufacturer of Rubberware agrees to sell the distributor 1,000 boxes of 2-quart bowls only if he agrees to resell to the retailer at cost plus $1.10 per bowl and the retailer must agree to sell at no less than his cost plus. 50 per bowl. This is:

Accepted Answer

A)  horizontal price fixing. 
B)  vertical price fixing. 
C)  vertical market allocation. 
D)  a group boycott. 
A)  horizontal price fixing. 
B)  vertical price fixing. 
C)  vertical market allocation. 
D)  a group boycott.

Question 3

Characterizing a type of restraint as per se illegal significantly affects the prosecution of an antitrust suit.

Accepted Answer

A) True 
 B)False

Question 4

Elko, Inc. and Fuldan, Inc. closely monitor each other's actions regarding the sale of consumer electronic products. Each corporation tries to match the other's product designs and specifications, prices, and advertising strategies. As a result, the two corporations have similar products, prices, and profits. Is this a violation of the antitrust laws?

Accepted Answer

This may very well be a violation of Sec

Question 5

A secondary-line injury to competition occurs when the recipient of a favored price passes the benefits of the lower price on to the next level of distribution.

Accepted Answer

A) True 
 B)False

Question 6

The main goal of antitrust regulation is to prevent competitive behavior among firms.

Accepted Answer

A) True 
 B)False

Question 7

The definition of price-fixing includes agreements that may, among other things:

Accepted Answer

A)  depress prices. 
B)  stabilize prices. 
C)  raise prices. 
D)  All of these are true. 
A)  depress prices. 
B)  stabilize prices. 
C)  raise prices. 
D)  All of these are true.

Question 8

In enforcing the Sherman Act, the DOJ examines conduct by foreign companies  to determine whether it would violate the law if it occurred within borders of the United States.

Accepted Answer

A) True 
 B)False

Question 9

In 1992 Horizontal Merger Guidelines were jointly issued by the Justice Department and the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 10

A merger involving noncompeting firms producing unrelated goods and services is termed a:

Accepted Answer

A)  tying arrangement. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  horizontal merger. 
A)  tying arrangement. 
B)  vertical merger. 
C)  conglomerate merger. 
D)  horizontal merger.

Question 11

The Clayton Act weakened the Sherman Act by eliminating illegal acts that had previously been prohibited.

Accepted Answer

A) True 
 B)False

Question 12

Section 1 of the Sherman Act does not prohibit concerted action.

Accepted Answer

A) True 
 B)False

Question 13

Regarding Section 2 of the Sherman Act, the standard test applied by the courts requires proof of a specific intent to monopolize plus a dangerous probability of success; however, this test neither defines "intent" nor gives a standard of power by which to measure "success."

Accepted Answer

A) True 
 B)False

Question 14

The National Cooperative Research Act provides that:

Accepted Answer

A)  joint ventures in the research and development of new technology are to be judged under the rule of reason test. 
B)  treble damages apply to all joint ventures formed in violation of the antitrust laws. 
C)  joint venture participants must under all circumstances report their intent to the Justice Department. 
D)  joint ventures formed to divide markets and fix prices are not illegal. 
A)  joint ventures in the research and development of new technology are to be judged under the rule of reason test. 
B)  treble damages apply to all joint ventures formed in violation of the antitrust laws. 
C)  joint venture participants must under all circumstances report their intent to the Justice Department. 
D)  joint ventures formed to divide markets and fix prices are not illegal.

Question 15

The rule of reason test, under the Sherman Antitrust Act:

Accepted Answer

A)  considers the makeup of a relevant industry. 
B)  does not consider the defendant's position in that industry. 
C)  considers the defendant's need for the financial gain from the restraint of trade. 
D)  does not consider competitor's ability to respond to the challenged practice of restraint of trade. 
A)  considers the makeup of a relevant industry. 
B)  does not consider the defendant's position in that industry. 
C)  considers the defendant's need for the financial gain from the restraint of trade. 
D)  does not consider competitor's ability to respond to the challenged practice of restraint of trade.

Question 16

Masson Supply sells hinges to retail outlets for $1.20. If Rorsch Ltd. approaches Strunk Hardware, one of Masson's customers, and offers to sell a comparable hinge for $1.10:

Accepted Answer

A)  Masson may, without violating the Robinson-Patman Act, lower its price to Strunk to $1.10, and Masson need not lower its price to its other customers. 
B)  Masson may not lower its price to Strunk to $1.10 unless it lowers its price to its other customers or it will violate the Robinson-Patman Act. 
C)  Masson may lower its price to Strunk to $1.05 in order to keep Strunk's business, even if Masson does not lower the price to its other customers, without violating the Robinson-Patman Act. 
D)  Masson may lower its price to Strunk without also lowering its price to Masson's other customers in order to allow Strunk to meet a lower price Strunk's competitor charges when selling Rorsch's hinges. 
A)  Masson may, without violating the Robinson-Patman Act, lower its price to Strunk to $1.10, and Masson need not lower its price to its other customers. 
B)  Masson may not lower its price to Strunk to $1.10 unless it lowers its price to its other customers or it will violate the Robinson-Patman Act. 
C)  Masson may lower its price to Strunk to $1.05 in order to keep Strunk's business, even if Masson does not lower the price to its other customers, without violating the Robinson-Patman Act. 
D)  Masson may lower its price to Strunk without also lowering its price to Masson's other customers in order to allow Strunk to meet a lower price Strunk's competitor charges when selling Rorsch's hinges.

Question 17

T he prohibition against horizontal price fixing covers any agreement between sellers to establish the maximum prices or minimum prices as well as other terms that affect prices to consumers, such as shipping fees, warranties, discount programs, and financing rates.

Accepted Answer

A) True 
 B)False

Question 18

The relevant geographic market for the determination of monopolization is not likely to ever be the entire United States.

Accepted Answer

A) True 
 B)False

Question 19

The Justice Department has expanded its enforcement policy of the Sherman Act to cover foreign companies' conduct that harms U.S. exports.

Accepted Answer

A) True 
 B)False

Question 20

A restraint involving collaboration among competitors at the same level in the chain of distribution is:

Accepted Answer

A)  a vertical restraint. 
B)  a horizontal restraint. 
C)  price fixing. 
D)  a trust. 
A)  a vertical restraint. 
B)  a horizontal restraint. 
C)  price fixing. 
D)  a trust.

Exam 42: Antitrust

Which of the following is correct regarding the Clayton Act?

The manufacturer of Rubberware agrees to sell the distributor 1,000 boxes of 2-quart bowls only if he agrees to resell to the retailer at cost plus $1.10 per bowl and the retailer must agree to sell at no less than his cost plus. 50 per bowl. This is:

Characterizing a type of restraint as per se illegal significantly affects the prosecution of an antitrust suit.

A secondary-line injury to competition occurs when the recipient of a favored price passes the benefits of the lower price on to the next level of distribution.

The main goal of antitrust regulation is to prevent competitive behavior among firms.

The definition of price-fixing includes agreements that may, among other things:

In enforcing the Sherman Act, the DOJ examines conduct by foreign companies to determine whether it would violate the law if it occurred within borders of the United States.

In 1992 Horizontal Merger Guidelines were jointly issued by the Justice Department and the Federal Trade Commission.

A merger involving noncompeting firms producing unrelated goods and services is termed a:

The Clayton Act weakened the Sherman Act by eliminating illegal acts that had previously been prohibited.

Section 1 of the Sherman Act does not prohibit concerted action.

Regarding Section 2 of the Sherman Act, the standard test applied by the courts requires proof of a specific intent to monopolize plus a dangerous probability of success; however, this test neither defines "intent" nor gives a standard of power by which to measure "success."

The National Cooperative Research Act provides that:

The rule of reason test, under the Sherman Antitrust Act:

Masson Supply sells hinges to retail outlets for $1.20. If Rorsch Ltd. approaches Strunk Hardware, one of Masson's customers, and offers to sell a comparable hinge for $1.10:

T he prohibition against horizontal price fixing covers any agreement between sellers to establish the maximum prices or minimum prices as well as other terms that affect prices to consumers, such as shipping fees, warranties, discount programs, and financing rates.

The relevant geographic market for the determination of monopolization is not likely to ever be the entire United States.

The Justice Department has expanded its enforcement policy of the Sherman Act to cover foreign companies' conduct that harms U.S. exports.

A restraint involving collaboration among competitors at the same level in the chain of distribution is:

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