Question 1

Under the Sherman Act, price fixing is the primary and most serious example of a per se violation.

Accepted Answer

A) True 
 B)False

Question 2

If all milk producers in the area agree to set a minimum price for raw milk, this would be an example of:

Accepted Answer

A)  horizontal allocation. 
B)  vertical market restraint. 
C)  horizontal price fixing. 
D)  a tying arrangement. 
A)  horizontal allocation. 
B)  vertical market restraint. 
C)  horizontal price fixing. 
D)  a tying arrangement.

Question 3

In enacting Section 2 of the Clayton Act, Congress was concerned with sellers who sought to harm or eliminate their competitors through:

Accepted Answer

A)  mergers. 
B)  price discrimination. 
C)  tying arrangements. 
D)  None of these. 
A)  mergers. 
B)  price discrimination. 
C)  tying arrangements. 
D)  None of these.

Question 4

Any violation of Section 2 of the Sherman Act constituting a conspiracy to monopolize would also constitute a violation of Section 1.

Accepted Answer

A) True 
 B)False

Question 5

The National Tax Accountants Professional Association (TAPA) has recommended that its members charge a minimum of $25 per hour for completing tax forms. This recommendation is probably:

Accepted Answer

A)  a per se price fixing violation of the Sherman Act. 
B)  not a violation of the Sherman Act, because it has been made by a professional association. 
C)  not a violation of the Sherman Act, because a fee is different from a price. 
D)  subject to the rule of reason. 
A)  a per se price fixing violation of the Sherman Act. 
B)  not a violation of the Sherman Act, because it has been made by a professional association. 
C)  not a violation of the Sherman Act, because a fee is different from a price. 
D)  subject to the rule of reason.

Question 6

An agreement between a manufacturer and a wholesaler is horizontal.

Accepted Answer

A) True 
 B)False

Question 7

Failure to comply with Section 1 or 2 of the Sherman Act:

Accepted Answer

A)  is a felony and can result in imprisonment. 
B)  may subject an individual to a fine of up to $1 million per violation. 
C)  may subject a corporation to a fine of $100 million per violation. 
D)  All of these are true. 
A)  is a felony and can result in imprisonment. 
B)  may subject an individual to a fine of up to $1 million per violation. 
C)  may subject a corporation to a fine of $100 million per violation. 
D)  All of these are true.

Question 8

McDonald's Corporation grants to Bob a franchise in which he will be the only one who has the right to sell McDonald's products in his small hometown. Under the Sherman Act:

Accepted Answer

A)  this is per se illegal. 
B)  there is no violation. 
C)  this will be tested under the rule of reason. 
D)  there is a tying arrangement. 
A)  this is per se illegal. 
B)  there is no violation. 
C)  this will be tested under the rule of reason. 
D)  there is a tying arrangement.

Question 9

Harry Jones at Jones Brothers Furniture Co. does not like the Brite Lamp Co. representative, so he decided that Jones Brothers would boycott Brite. Under the Sherman Act, this is:

Accepted Answer

A)  per se illegal. 
B)  no violation. 
C)  a tying arrangement. 
D)  vertical market allocation. 
A)  per se illegal. 
B)  no violation. 
C)  a tying arrangement. 
D)  vertical market allocation.

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

Conglomerate mergers have been challenged only when:

Accepted Answer

A)  one of the merging firms would be highly likely to enter the other firm's market. 
B)  the merged company would be disproportionately large, compared with the smallest competitors in its industry. 
C)  Both of these. 
D)  Neither of these. 
A)  one of the merging firms would be highly likely to enter the other firm's market. 
B)  the merged company would be disproportionately large, compared with the smallest competitors in its industry. 
C)  Both of these. 
D)  Neither of these.

Question 12

The Robinson-Patman Act adds to the Clayton Act merger provisions.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

Under the 2004 amendments, corporate offenders who violate Sections 1 or 2 of the Sherman Act face fines of up to $100 million per violation.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

To find a violation of Section 2 of the Sherman Act, if sufficient monopoly power has been proved, the law must then show that the firm has engaged in unfair conduct .

Accepted Answer

A) True 
 B)False

Question 18

If a small manufacturer of vacuum cleaners conditions the sales of its cleaners on the buyer's purchasing only that manufacturer's bags, under the Sherman Act this is:

Accepted Answer

A)  illegal per se . 
B)  a tying arrangement, which will be closely scrutinized by the law. 
C)  a vertical customer restriction. 
D)  no violation. 
A)  illegal per se . 
B)  a tying arrangement, which will be closely scrutinized by the law. 
C)  a vertical customer restriction. 
D)  no violation.

Question 19

The concerted action requirement of the Sherman Act Section 1:

Accepted Answer

A)  may be established by an express agreement. 
B)  is not met when a parent corporation and its wholly owned subsidiaries agree to a restraint in trade. 
C)  requires factors, additional to conscious parallelism, such as identical sealed bids from each competitor. 
D)  All of these 
A)  may be established by an express agreement. 
B)  is not met when a parent corporation and its wholly owned subsidiaries agree to a restraint in trade. 
C)  requires factors, additional to conscious parallelism, such as identical sealed bids from each competitor. 
D)  All of these

Question 20

Which of the following is true in relation to market share and monopoly power?

Accepted Answer

A)  A market share greater than 50% generally indicates monopoly power. 
B)  A market share between 50 and 75% is, in itself, inconclusive in determining monopoly power. 
C)  Market share is rarely used as a test of monopoly power because it is difficult to determine. 
D)  Market share is a common test for monopoly power because it is an easy, objective measurement for courts to determine. 
A)  A market share greater than 50% generally indicates monopoly power. 
B)  A market share between 50 and 75% is, in itself, inconclusive in determining monopoly power. 
C)  Market share is rarely used as a test of monopoly power because it is difficult to determine. 
D)  Market share is a common test for monopoly power because it is an easy, objective measurement for courts to determine.

Exam 42: Antitrust

Under the Sherman Act, price fixing is the primary and most serious example of a per se violation.

If all milk producers in the area agree to set a minimum price for raw milk, this would be an example of:

In enacting Section 2 of the Clayton Act, Congress was concerned with sellers who sought to harm or eliminate their competitors through:

Any violation of Section 2 of the Sherman Act constituting a conspiracy to monopolize would also constitute a violation of Section 1.

The National Tax Accountants Professional Association (TAPA) has recommended that its members charge a minimum of $25 per hour for completing tax forms. This recommendation is probably:

An agreement between a manufacturer and a wholesaler is horizontal.

Failure to comply with Section 1 or 2 of the Sherman Act:

McDonald's Corporation grants to Bob a franchise in which he will be the only one who has the right to sell McDonald's products in his small hometown. Under the Sherman Act:

Harry Jones at Jones Brothers Furniture Co. does not like the Brite Lamp Co. representative, so he decided that Jones Brothers would boycott Brite. Under the Sherman Act, this is:

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

Conglomerate mergers have been challenged only when:

The Robinson-Patman Act adds to the Clayton Act merger provisions.

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:

Which of the following is correct regarding the Clayton Act?

Under the 2004 amendments, corporate offenders who violate Sections 1 or 2 of the Sherman Act face fines of up to $100 million per violation.

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

To find a violation of Section 2 of the Sherman Act, if sufficient monopoly power has been proved, the law must then show that the firm has engaged in unfair conduct .

If a small manufacturer of vacuum cleaners conditions the sales of its cleaners on the buyer's purchasing only that manufacturer's bags, under the Sherman Act this is:

The concerted action requirement of the Sherman Act Section 1:

Which of the following is true in relation to market share and monopoly power?

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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