Question 1

Which of the following may be at least partly exempt from antitrust laws?

Accepted Answer

A)   agricultural cooperatives
B)   insurance firms regulated by the states
C)   a group of domestic producers who band together to sell exports
D)   all of the other specific choices
E)   none of the other choicesF) C) and E)
G) B) and E)

Question 2

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Accepted Answer

A)   the case goes to the courts for review
B)   the case goes to a special tribunal for review
C)   the two companies have to pay high fines
D)   the two companies have to pay minor fines
E)   none of the other choices are correctF) B) and D)
G) A) and C)

Question 3

OPEC, the oil cartel, has been held not to violate the antitrust laws because of the power-buyer defense.

Accepted Answer

A) True 
 B)False

Question 4

The cost justification defense used by firms charged with violating Robinson-Patman:

Accepted Answer

A)   is often successfully applied
B)   must meet FTC vertical guideline standards
C)   is difficult to use because costs usually cannot be assigned to specific products sold to particular buyers
D)   all of the other specific choices
E)   none of the other choicesF) C) and D)
G) B) and E)

Question 5

Violations of Sections 1 and 2 of the Sherman Act by an individual can result in:

Accepted Answer

A)   up to 10 years in prison
B)   a fine of $1 million
C)   a fine of $5 million
D)   both a and b are correct
E)   both a and c are correctF) A) and B)
G) B) and E)

Question 6

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Accepted Answer

A)   market power
B)   profitability
C)   market control
D)   market proportion
E)   none of the other choices are correctF) C) and E)
G) All of the above

Question 7

Violations of the Clayton Act are the responsibility of the Justice Department and the Federal Trade Commission.

Accepted Answer

A) True 
 B)False

Question 8

When firms at the same level of operation, such as several auto parts dealers, get together for some illegal purpose, it is called:

Accepted Answer

A)   a group boycott
B)   a vertical restraint of trade
C)   a de facto merger
D)   a concentrated industry
E)   none of the other choicesF) C) and E)
G) D) and E)

Question 9

When firms competing at the same level of business agree to allocate territories in a market, and fix prices at the same time, the following may result:

Accepted Answer

A)   firms may exercise monopoly power in their assigned region
B)   competition within regions will be reduced
C)   their actions may be found per se illegal
D)   the Sherman Act may be violated
E)   all of the other choicesF) C) and E)
G) D) and E)

Question 10

Under the merger guidelines a major reason to approve a merger is:

Accepted Answer

A)   the demonstration that the merger will increase profits
B)   the demonstration that the merger will reduce profits
C)   the demonstration that the merger will create jobs
D)   the demonstration that the merger will reduce market share
E)   none of the other choices are correctF) C) and D)
G) A) and B)

Question 11

Based on court rulings, one would expect that retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long as:

Accepted Answer

A)   they agree to fix prices in a vertical arrangement
B)   they agree to fix prices in a horizontal arrangement
C)   they agree to fix prices in a territorial arrangement
D)   their activities help interbrand competition
E)   none of the other choicesF) A) and D)
G) A) and E)

Question 12

Which of the following is not permitted as a possible remedy in antitrust actions?

Accepted Answer

A)   force a company to sell a subsidiary
B)   force a company to let other use its patents
C)   force a company to buy another company
D)   force a company to create a new company to compete with it
E)   all of the other choices are permittedF) C) and D)
G) C) and E)

Question 13

Horizontal market division is often held to violate antitrust law because it:

Accepted Answer

A)   decreases exports
B)   increases efficiency, but raises prices
C)   leads to price fixing
D)   gives consumers more choice
E)   none of the other choices are correctF) A) and E)
G) A) and B)

Question 14

Which of the following has the right to sue for violation of antitrust laws:

Accepted Answer

A)   a private individual
B)   a small business
C)   a big business
D)   all of the other specific choices are correct
E)   none of the other specific choices are correctF) D) and E)
G) C) and D)

Question 15

Alpha, an expensive brand of watch that sell for $5,000 (suggested retail price) , sells to fine jewelry stores for $2,500. Irritated that Amer's Jewelry is selling the watches to the public for $4,000, while competitors are selling for $5,000, stops selling the watches to Amer's. Amer's sues Alpha for antitrust violation. It is likely that Amer's will:

Accepted Answer

A)   win for price fixing violation of the Sherman Act
B)   win for Robinson-Patman Act violation
C)   win for Section 5 FTC Act violation
D)   lose because it violates the Robinson-Patman Act
E)   none of the other choicesF) None of the above
G) A) and D)

Question 16

In Eastman Kodak v. Image Technical Services, Kodak was charged with tying the sale of service of their copiers and other equipment to the sale of parts. The Supreme Court ruled:

Accepted Answer

A)   no tying arrangement existed because the markets for service and sale of parts overlapped
B)   no tying arrangement was proved to have existed, so there could be no antitrust illegality
C)   a tying arrangement existed, but Kodak held a small share of the market for service and parts, so rule of reason analysis allowed the arrangement to stand
D)   no tying arrangement existed because independent service organizations could purchase Kodak parts from Kodak whenever they so desired
E)   none of the other choicesF) A) and C)
G) B) and C)

Question 17

In U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline company, the Supreme Court would not allow the merger because:

Accepted Answer

A)   the concentration ratio in the relevant product market was too high
B)   the concentration ratio in the relevant geographic market was too high
C)   a vital utility like natural gas should not be monopolized
D)   the firms were potential competitors
E)   none of the other choicesF) B) and C)
G) A) and E)

Question 18

A ____ occurs when the businesses involved operate at the same level of the market and generally in the same market.

Accepted Answer

A)   vertical restraint of trade
B)   cartel
C)   vertical merger
D)   monopoly
E)   none of the other choices are correctF) A) and C)
G) B) and E)

Question 19

Fact Pattern 20-2
Vysion produces TVs it sells nationwide. Vysion contracted with Karol's Appliances to make it the exclusive distributor of Vysion TVs in the San Diego area. Karol's received a promise that Vysion would not sell its TVs to any other retailer within 20 miles of Karol's.
In its San Diego stores, Karol's has a unique pricing policy. A higher price is charged to customers wearing suits than to customers not wearing suits. Karol's salespeople give non-suit-wearing customers 10% discounts off of the list price, and refuse any discounts to suit-wearing customers.
Don's, a rival of Karol's, asked Vysion to allow it to sell its products in San Diego. Vysion refused, pointing to its contract with Karol's. Vysion's distribution policy differs in New York from what it is in California. In New York, Vysion allows every distributor who asks to sell Vysion TVs. However, Vysion requires that New York retailers sign contracts stating that they agree not to sell Vysion products below prices in a monthly "price list" sent by Vysion.
In contracts with its distributors nationwide, Vysion insists that sales of its TVs be tied to sales of its VCRs. No consumer is allowed to purchase a Vysion TV without also buying a Vysion VCR.
-Refer to Fact Pattern 20-2. The agreement between Vysion and its New York retailers to charge customers according to a "price list" is:

Accepted Answer

A)   a resale price maintenance agreement
B)   a tax incentive agreement
C)   a tax shelter agreement
D)   a horizontal sales agreement
E)   a securities exchange agreementF) C) and D)
G) A) and C)

Question 20

In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not follow its pricing policy (resale price maintenance) . The Supreme Court held that:

Accepted Answer

A)   resale price maintenance is always illegal as stated in Dr. Miles Medical Co. v. John D. Park & Sons
B)   resale price maintenance can help promote intrabrand competition, which is the primary purpose of the antitrust laws
C)   vertical price fixing can help promote intrabrand competition, which is the primary purpose of the antitrust laws
D)   horizontal price fixing can help promote interbrand competition, which is the primary purpose of the antitrust laws
E)   none of the other choices are correctF) D) and E)
G) B) and E)

Exam 20: Antitrust Law

OPEC, the oil cartel, has been held not to violate the antitrust laws because of the power-buyer defense.

Correct Answer
verified

In Eastman Kodak v. Image Technical Services, Kodak was charged with tying the sale of service of their copiers and other equipment to the sale of parts. The Supreme Court ruled:

Correct Answer
verified

Which of the following has the right to sue for violation of antitrust laws:

Correct Answer
verified

In U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline company, the Supreme Court would not allow the merger because:

Correct Answer
verified

In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not follow its pricing policy (resale price maintenance) . The Supreme Court held that:

Correct Answer
verified

Which of the following may be at least partly exempt from antitrust laws?

Correct Answer
verified

Correct Answer
verified

Violations of Sections 1 and 2 of the Sherman Act by an individual can result in:

Correct Answer
verified

Under the merger guidelines a major reason to approve a merger is:

Correct Answer
verified

Which of the following is not permitted as a possible remedy in antitrust actions?

Correct Answer
verified

Correct Answer
verified

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Correct Answer
verified

Violations of the Clayton Act are the responsibility of the Justice Department and the Federal Trade Commission.

Correct Answer
verified

Horizontal market division is often held to violate antitrust law because it:

Correct Answer
verified

When firms competing at the same level of business agree to allocate territories in a market, and fix prices at the same time, the following may result:

Correct Answer
verified

Based on court rulings, one would expect that retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long as:

Correct Answer
verified

When firms at the same level of operation, such as several auto parts dealers, get together for some illegal purpose, it is called:

Correct Answer
verified

The cost justification defense used by firms charged with violating Robinson-Patman:

Correct Answer
verified

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Correct Answer
verified

A ____ occurs when the businesses involved operate at the same level of the market and generally in the same market.

Correct Answer
verified

Exam 20: Antitrust Law

OPEC, the oil cartel, has been held not to violate the antitrust laws because of the power-buyer defense.

Correct AnswerverifiedShow Answer

In Eastman Kodak v. Image Technical Services, Kodak was charged with tying the sale of service of their copiers and other equipment to the sale of parts. The Supreme Court ruled:

Correct AnswerverifiedShow Answer

Which of the following has the right to sue for violation of antitrust laws:

Correct AnswerverifiedShow Answer

In U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline company, the Supreme Court would not allow the merger because:

Correct AnswerverifiedShow Answer

In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not follow its pricing policy (resale price maintenance) . The Supreme Court held that:

Correct AnswerverifiedShow Answer

Which of the following may be at least partly exempt from antitrust laws?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Violations of Sections 1 and 2 of the Sherman Act by an individual can result in:

Correct AnswerverifiedShow Answer

Under the merger guidelines a major reason to approve a merger is:

Correct AnswerverifiedShow Answer

Which of the following is not permitted as a possible remedy in antitrust actions?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Correct AnswerverifiedShow Answer

Violations of the Clayton Act are the responsibility of the Justice Department and the Federal Trade Commission.

Correct AnswerverifiedShow Answer

Horizontal market division is often held to violate antitrust law because it:

Correct AnswerverifiedShow Answer

When firms competing at the same level of business agree to allocate territories in a market, and fix prices at the same time, the following may result:

Correct AnswerverifiedShow Answer

Based on court rulings, one would expect that retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long as:

Correct AnswerverifiedShow Answer

When firms at the same level of operation, such as several auto parts dealers, get together for some illegal purpose, it is called:

Correct AnswerverifiedShow Answer

The cost justification defense used by firms charged with violating Robinson-Patman:

Correct AnswerverifiedShow Answer

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Correct AnswerverifiedShow Answer

A ____ occurs when the businesses involved operate at the same level of the market and generally in the same market.

Correct AnswerverifiedShow Answer

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