Question 1

Failure to comply with Section 1,but not Section 2,of the Sherman Act is a criminal violation.

Accepted Answer

A) True 
 B)False

Question 2

Margaret tells the members of the Raleigh Association of Restaurant Owners that they will be able to get a better price on linen supplies (tablecloths,napkins)if they will deal with one supplier rather than split their business between two.They all know Margaret deals with Niagara Linen rather than Cayuga.Under the Sherman Act,if they all sign contracts with Niagara:

Accepted Answer

A) there is no violation since there is no express agreement to boycott Cayuga. 
B) illegality may be implied from this conduct. 
C) there is no concerted action. 
D) this is horizontal market allocation. 
A) there is no violation since there is no express agreement to boycott Cayuga. 
B) illegality may be implied from this conduct. 
C) there is no concerted action. 
D) this is horizontal market allocation.

Question 3

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 4

Creativ-Design,Inc.has 68% of the market share in a particular geographic region for one of its products.Does Creativ-Design have a monopoly?

Accepted Answer

No exact percentage of market share has

Question 5

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 6

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 the above. 
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 the above.

Question 7

Under Section 1 of the Sherman Act,which of the following is illegal per se?

Accepted Answer

A) Vertical market allocations. 
B) Horizontal market allocations. 
C) Vertical price restraints. 
D) Both (b) and (c). 
A) Vertical market allocations. 
B) Horizontal market allocations. 
C) Vertical price restraints. 
D) Both (b) and (c).

Question 8

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 9

When the per se approach is inappropriate in a Section 1 Sherman Act case but the challenged conduct has obvious anticompetitive effects,courts may use an intermediate test which is a "quick look" rule of reason analysis.

Accepted Answer

A) True 
 B)False

Question 10

The common law traditionally:

Accepted Answer

A) favored competition. 
B) held that contracts in restraint of trade are illegal and unenforceable. 
C) favored concentrations of economic power in the form of trusts and combinations. 
D) Both (a) and (b). 
A) favored competition. 
B) held that contracts in restraint of trade are illegal and unenforceable. 
C) favored concentrations of economic power in the form of trusts and combinations. 
D) Both (a) and (b).

Question 11

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 12

In order for there to be a violation of Section 2 of the Sherman Act,in addition to monopoly power,the courts must find:

Accepted Answer

A) unfair conduct or abuse of power. 
B) concerted action. 
C) competitive behavior. 
D) economic advantage. 
A) unfair conduct or abuse of power. 
B) concerted action. 
C) competitive behavior. 
D) economic advantage.

Question 13

Discuss the validity and effect of each of the following:
a.Two manufacturers of the same product decide to allocate territories with one taking the southern states.
b.A labor union encourages its members and all consumers to boycott a product manufactured by a company that refuses to honor a union contract.
c.Betty's Bargain Department Store sells its products for 10% under the suggested retail price. One manufacturer tells the store it will not supply wholesale goods to it unless it charges at least the suggested retail price.

Accepted Answer

a.This is a horizontal market allocation

Question 14

The Federal Trade Commission was created by the Sherman Act and its powers are limited to preventing unfair methods of competition as set forth in the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 15

Under the 2004 amendments,individuals who violate the Sherman Antitrust Act,Sections 1 or 2,may be imprisoned for ten years and fined up to $1 million.

Accepted Answer

A) True 
 B)False

Question 16

Some group boycotts are illegal per se while others are subject to the rule of reason.

Accepted Answer

A) True 
 B)False

Question 17

The validity,under antitrust law,of a joint venture depends on the competitors' purpose in forming it.

Accepted Answer

A) True 
 B)False

Question 18

A "Vertical Restraint Index" is a measure of relative market share.

Accepted Answer

A) True 
 B)False

Question 19

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) (a) and (b) are correct. 
D) None of the above. 
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) (a) and (b) are correct. 
D) None of the above.

Question 20

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.

Exam 42: Antitrust

Failure to comply with Section 1,but not Section 2,of the Sherman Act is a criminal violation.

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

Creativ-Design,Inc.has 68% of the market share in a particular geographic region for one of its products.Does Creativ-Design have a monopoly?

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

Under Section 1 of the Sherman Act,which of the following is illegal per se?

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.

When the per se approach is inappropriate in a Section 1 Sherman Act case but the challenged conduct has obvious anticompetitive effects,courts may use an intermediate test which is a "quick look" rule of reason analysis.

The common law traditionally:

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:

In order for there to be a violation of Section 2 of the Sherman Act,in addition to monopoly power,the courts must find:

The Federal Trade Commission was created by the Sherman Act and its powers are limited to preventing unfair methods of competition as set forth in the Sherman Act.

Under the 2004 amendments,individuals who violate the Sherman Antitrust Act,Sections 1 or 2,may be imprisoned for ten years and fined up to $1 million.

Some group boycotts are illegal per se while others are subject to the rule of reason.

The validity,under antitrust law,of a joint venture depends on the competitors' purpose in forming it.

A "Vertical Restraint Index" is a measure of relative market share.

Conglomerate mergers have been challenged only when:

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

Introduction to Law

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