Question 1

Sections 1 and 2 of the Sherman Act have extraterritorial reach.

Accepted Answer

A) True 
 B)False

Question 2

The merger of an airplane manufacturer and an airplane engine manufacturer would normally be considered a conglomerate merger.

Accepted Answer

A) True 
 B)False

Question 3

The main goal of Section 7 of the Clayton Act is to prohibit:

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 4

What was the first U.S.antitrust law?

Accepted Answer

A)  The Hart-Scott-Rodino Antitrust Improvements Act 
B)  The Robinson-Patman Act 
C)  The Clayton Act 
D)  The Sherman Act 
A)  The Hart-Scott-Rodino Antitrust Improvements Act 
B)  The Robinson-Patman Act 
C)  The Clayton Act 
D)  The Sherman Act

Question 5

What is a natural monopoly,and what can be done to keep natural monopolies from overcharging customers?

Accepted Answer

Natural monopolies occur where productiv

Question 6

The European Union takes a stricter view of vertical territorial restraints because of their tendency to impede continent-wide market integration.

Accepted Answer

A) True 
 B)False

Question 7

Merritt runs the best dog grooming shop in town.All the dogs love Merritt,as do the owners.Merritt's popularity is helped by a special type of dog biscuit provided as treats that result in such energy that owners have been known to try them too.Slowly but surely all the other dog grooming shops start to go out of business.Merritt claims surprise when charged with unlawfully monopolizing the dog grooming business.Which of the following would be Merritt's best defense?

Accepted Answer

A)  Merritt primarily provided biscuits,not grooming. 
B)  Merritt did not intentionally obtain monopoly power or retain it through anticompetitive acts. 
C)  Merritt did not intentionally obtain monopoly power,and it was legally acceptable to willfully attempt to keep it. 
D)  Services,not goods,were involved. 
A)  Merritt primarily provided biscuits,not grooming. 
B)  Merritt did not intentionally obtain monopoly power or retain it through anticompetitive acts. 
C)  Merritt did not intentionally obtain monopoly power,and it was legally acceptable to willfully attempt to keep it. 
D)  Services,not goods,were involved.

Question 8

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 9

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 10

In a __________ action under the Sherman Act,state attorneys general may bring civil actions for injuries sustained by residents of their respective states.

Accepted Answer

A)  parens patriae 
B)  private attorneys general 
C)  Herfindahl-Hirschman 
D)  resale price maintenance 
A)  parens patriae 
B)  private attorneys general 
C)  Herfindahl-Hirschman 
D)  resale price maintenance

Question 11

What agencies are responsible for enforcing federal antitrust laws,and how does a Type A corporate leniency from criminal prosecution differ from a Type B leniency?

Accepted Answer

The two federal agencies responsible for

Question 12

Happy City has three distributors of milk products.Shawn,who owns a grocery store,angers one of the distributors by insisting that additional milk be delivered on Christmas Eve.Shawn annoys another distributor after making 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 Shawn.One of them has an idea that they should stop selling milk products to Shawn.The milk distributors call their friends the meat distributors and talk them into not selling meat to Shawn either.Shawn 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 Shawn?

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 because this agreement was 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 because this agreement was among sellers who do not legally have to sell to any particular buyer.

Question 13

In a monopolized market,the deadweight loss is calculated as:

Accepted Answer

A)  the difference between the value of a good to consumers (measured by the price they would be willing to pay for the good)and the price they actually must pay to obtain the good. 
B)  the difference between the cost to producers of producing a good (measured by the minimum price at which they would sell a given quantity of the good)and the price they actually receive in the market. 
C)  the difference between total surplus in a competitive market and total surplus in a monopolized market. 
D)  the equilibrium at which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps from their use. 
A)  the difference between the value of a good to consumers (measured by the price they would be willing to pay for the good)and the price they actually must pay to obtain the good. 
B)  the difference between the cost to producers of producing a good (measured by the minimum price at which they would sell a given quantity of the good)and the price they actually receive in the market. 
C)  the difference between total surplus in a competitive market and total surplus in a monopolized market. 
D)  the equilibrium at which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps from their use.

Question 14

What three factors does a court primarily look to in determining whether a horizontal merger is permissible once the market is defined? Discuss fully.

Accepted Answer

Once the market is defined,the court wil

Question 15

In Pac.Bell Tel.Co.v.Linkline Commc'ns,Inc.(2009),the Supreme Court ruled that a price-squeezing claim may not be brought under Section 2 when the retail price does not constitute predatory pricing,which requires below-cost retail pricing.

Accepted Answer

A) True 
 B)False

Question 16

Explain the purpose and scope of the Robinson-Patman Act.What factors will courts use in determining whether a violation has occurred? Discuss fully.

Accepted Answer

The Robinson-Patman Act prohibits price

Question 17

Vertical market division between a franchisor and a franchisee may be lawful when interbrand competition is enhanced by the limitation on intrabrand competition.

Accepted Answer

A) True 
 B)False

Question 18

The agreement of all the commercial airlines not to lower their fares would be an example of a:

Accepted Answer

A)  vertical restraint of trade. 
B)  horizontal restraint of trade. 
C)  tying arrangement. 
D)  monopoly. 
A)  vertical restraint of trade. 
B)  horizontal restraint of trade. 
C)  tying arrangement. 
D)  monopoly.

Question 19

With a(n)__________ distributorship,a manufacturer limits itself to a single distributor in a given territory,which is a form of _____ restraint of trade.

Accepted Answer

A)  dual; horizontal 
B)  exclusive; vertical 
C)  franchise; vertical 
D)  market-power; horizontal 
A)  dual; horizontal 
B)  exclusive; vertical 
C)  franchise; vertical 
D)  market-power; horizontal

Question 20

Market power,the power to control prices or exclude competition in a relevant market,is different from monopoly power.

Accepted Answer

A) True 
 B)False

Exam 16: Antitrust

Sections 1 and 2 of the Sherman Act have extraterritorial reach.

The merger of an airplane manufacturer and an airplane engine manufacturer would normally be considered a conglomerate merger.

The main goal of Section 7 of the Clayton Act is to prohibit:

What was the first U.S.antitrust law?

What is a natural monopoly,and what can be done to keep natural monopolies from overcharging customers?

The European Union takes a stricter view of vertical territorial restraints because of their tendency to impede continent-wide market integration.

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 true regarding conscious parallelism?

In a __________ action under the Sherman Act,state attorneys general may bring civil actions for injuries sustained by residents of their respective states.

What agencies are responsible for enforcing federal antitrust laws,and how does a Type A corporate leniency from criminal prosecution differ from a Type B leniency?

In a monopolized market,the deadweight loss is calculated as:

What three factors does a court primarily look to in determining whether a horizontal merger is permissible once the market is defined? Discuss fully.

In Pac.Bell Tel.Co.v.Linkline Commc'ns,Inc.(2009),the Supreme Court ruled that a price-squeezing claim may not be brought under Section 2 when the retail price does not constitute predatory pricing,which requires below-cost retail pricing.

Explain the purpose and scope of the Robinson-Patman Act.What factors will courts use in determining whether a violation has occurred? Discuss fully.

Vertical market division between a franchisor and a franchisee may be lawful when interbrand competition is enhanced by the limitation on intrabrand competition.

The agreement of all the commercial airlines not to lower their fares would be an example of a:

With a(n)__________ distributorship,a manufacturer limits itself to a single distributor in a given territory,which is a form of _____ restraint of trade.

Market power,the power to control prices or exclude competition in a relevant market,is different from monopoly power.

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