Deck 45: The Antitrust Laws

Question 1

In most cases,only a probability of anticompetitive effect is necessary for Clayton Act violations.

Answer 1

True

Question 2

Tie-in contracts occur when a seller refuses to sell a product to a buyer unless the buyer also purchases another product from the seller.

Answer 2

True

Question 3

The Foreign Trade Antitrust Improvement Act provides that the Sherman Act shall never apply to nonimport trade.

Answer 3

False

Question 4

The two components to a relevant market determination to decide if a firm has monopoly power are the geographic market and the product market.

Question 5

The ________ gives the federal courts broad injunctive powers to remedy antitrust violations.

A)Noerr Doctrine
B)Sherman Act
C)Parker Doctrine
D)Robinson-Patman Act

Question 6

Under the Sherman Act,courts are given the power to order the dissolution of violators of the Act in extreme cases.

Question 7

Acts classified as per se illegal are presumed to be illegal.

Question 8

________ provides that the Sherman Act shall not apply to nonimport trade unless the conduct has a direct,substantial,and reasonably foreseeable effect on trade or commerce within the U.S,on the U.S.import trade,or on the activities of U.S.exporters.

A)The Robinson-Patman Act
B)The Clayton Act
C)The Noerr Doctrine
D)The Foreign Trade Antitrust Improvement Act

Question 9

The federal government's right to regulate business is derived from the _____ of the U.S.Constitution.

A)Commerce Clause
B)Separation Clause
C)Due Process Clause
D)Renegade Clause

Question 10

Anti-trust laws aim to maintain domestic and international competition and protect consumers from anti-trust conduct.

Question 11

Even behavior that affects only intrastate (purely local)commerce is within the scope of the federal antitrust laws.

Question 12

Foreign sovereign compulsion defense is in no way related to sovereign immunity.

Question 13

To which of the following antitrust violations do federal antitrust laws apply?

A)Behavior that affects only intrastate (purely local)commerce.
B)Behavior that substantially affects interstate commerce or international trade.
C)Behavior that affects external economies other than the U.S.
D)Any type of nonimport trade.

Question 14

Section 1 of the Sherman Act aims to attack joint action in restraint of trade.

Question 15

Since the Clayton Act deals with probable harms to competition,there is criminal liability for Clayton Act violations.

Question 16

The Sherman Act:

A)makes contracts in restraint of trade and monopolization illegal.
B)does not provide criminal penalties for violations of its provisions.
C)does not give the federal courts any injunctive powers.
D)was specifically designed to attack tie-in,exclusive dealing,and requirements contracts.

Question 17

The Parker Doctrine exempts many anticompetitive acts from the antitrust laws.

Question 18

Under no circumstances can a single firm lawfully refuse to deal with firms or agree to deal only on certain terms.

Question 19

Horizontal (among competitors)price fixing is always per se illegal.

Question 20

When a manufacturer states a "suggested retail price" for their products,this violates Section 1 of the Sherman Act.

Question 21

Section 3 of the Clayton Act was designed to attack:

A)licensing arrangements.
B)exclusive dealing contracts.
C)aleatory contracts.
D)interlocking contracts.

Question 22

Tie-in contracts:

A)violate Section 3 of the Clayton Act regardless of the seller having monopoly power in the tie-in product.
B)do not violate Section 1 of the Sherman Act under any circumstance.
C)violate Section 3 of the Clayton Act if the seller has foreclosed competitors from a substantial volume of commerce in the tied product.
D)violate Section 1 of the Sherman Act and Section 7 of the Clayton Act.

Question 23

A lawn and garden store agreeing to sell only Brand A lawn mowers is an example of:

A)a requirements contract.
B)an exclusive dealing contract.
C)a tie-in contract.
D)price discrimination.

Question 24

The abbreviated rule of reason analysis applies to:

A)restraints in which the overall reasonableness can be ascertained without a thorough examination of their pernicious and beneficial effects in the relevant markets.
B)restraints that have an obvious adverse impact on competition,but whose overall reasonableness cannot be immediately ascertained.
C)fully competitive behavior.
D)restraints that deserve a per se treatment because of their obvious unreasonableness.

Question 25

When a manufacturer sells goods to retail outlets and suggests a retail price,there is no violation of Section 1 of the Sherman Act because:

A)there is no merger of any type.
B)there is no contract,combination,or conspiracy to fix the price.
C)there is no indication of an intent to monopolize.
D)there is no exclusive dealing contract.

Question 26

Section 3 of the Clayton Act applies to:

A)service contracts.
B)true consignments.
C)anticompetitive behavior.
D)monopolies.

Question 27

Tie-in contracts are illegal under:

A)Section 3 of the Clayton Act.
B)Section 2 of the Sherman Act.
C)Section 7 of the Clayton Act.
D)Section 2(a)of the Robinson-Patman Act.

Question 28

Section 1 of the Sherman Act applies to:

A)unilateral actions.
B)joint actions.
C)nonimport trade.
D)mergers.

Question 29

Licensing arrangements are:

A)per se violations of U.S.anti-trust laws.
B)subject to the rule of reason.
C)subject to strict scrutiny analysis.
D)unlikely to raise antitrust issues.

Question 30

Acme Candy,Inc.agrees to buy all the sugar it requires from one sugar refiner.Which type of contract is created in this case?

A)Requirements
B)Tie-in
C)Exclusive dealing
D)Interlocking

Question 31

Which of the following is true of joint ventures?

A)They are arrangements in which two or more entities collaborate with respect to research,development,production,marketing,or distribution.
B)They directly violate Section 2 of the Sherman Act.
C)If the venture partners have complied with the act's notification requirements,they are liable for only treble damages in any civil suits that successfully challenge the arrangement.
D)They refer to the acquisition of one company by the other.

Question 32

Which of the following is true of a consignment agreement?

A)If a manufacturer delivers all goods to its dealers on a consignment basis,the goods become the property of the dealer.
B)The owner of goods delivers them to another who is to act as the owner's agent in selling the goods.
C)If a manufacturer delivers all goods to its dealers on a consignment basis,the dealer can lawfully fix the price of those goods.
D)Consignments have been held to be joint action.

Question 33

Which of the following is true of vertical price-fixing?

A)It is an attempt by competitors to interfere with the market and control prices.
B)Vertical price fixing is not within the scope of section 1 of the Sherman Act.
C)It is illegal per se for manufacturers to state a "suggested retail price" for their products.
D)It is an attempt by manufacturers to control the resale price of their products.

Question 34

The functional interchangeability test helps to determine if:

A)a firm controls a very high percentage share of the relevant market.
B)the plaintiff has standing to bring an antitrust suit.
C)there has been joint action.
D)the defendant had an anticompetitive intent.

Question 35

Full rule of reason analysis:

A)cannot be determined until after a court conducts a full market analysis.
B)is a "quick look" form of rule of reason analysis.
C)like per se restraints,applies to restraints that are facially illegal.
D)is utilized for restraints that have an obvious adverse impact on competition.

Question 36

Section 2 of the Sherman Act:

A)outlaws monopolies.
B)outlaws the act of "monopolizing."
C)outlaws monopolies and monopolizing.
D)outlaws contracts,combinations,and conspiracies.

Question 37

Acme Seeds,Inc.refuses to sell its seeds to farmers unless they also agree to buy fertilizer from Acme,this is an example of a(n):

A)requirements contract.
B)tie-in contract.
C)exclusive dealing contract.
D)indirect price discrimination.

Question 38

Horizontal price fixing:

A)is also called resale price fixing.
B)can be legally justified if there was a direct agreement between competitors.
C)occurs when the manufacturer gets the retailer to agree to follow the suggested retail price.
D)is an attempt by competitors to interfere with the market and control prices.

Question 39

If a distributor persuades a manufacturer to refuse to deal with a rival distributor,the two parties:

A)have committed a per se violation of Section 1 of the Sherman Act.
B)do not violate Section 1 of the Sherman Act since this is a unilateral action.
C)are conspiring to form a monopoly thus directly violating Section 2 of the Sherman Act.
D)are attempting vertical price-fixing.

Question 40

In a typical predatory-pricing scheme,the predator:

A)reflects changing conditions in the marketplace affecting the marketability of competitor's goods.
B)reduces the sale price of its product to below cost,hoping to drive competitors out of business.
C)grants a discriminatory price to a customer who has been offered a lawful,lower price by competitors.
D)furnishes customers with certain services that were not provided by the competitors.

Question 41

An oil producer's merger with an oil refiner is an example of a:

A)conglomerate merger.
B)push down merger.
C)horizontal merger.
D)vertical merger.

Question 42

Describe the Hart-Scott-Rodino Antitrust Improvements Act.

Question 43

Describe the type of behavior Section 3 of the Clayton Act is designed to attack.

Question 44

Describe Section 2 of the Sherman Act.

Question 45

Conglomerate mergers that create a potential for reciprocal dealing have been successfully challenged under:

A)Section 3 of the Clayton Act.
B)Section 2 of the Sherman Act.
C)Section 7 of the Clayton Act.
D)Section 2(a)of the Robinson-Patman Act.

Question 46

Describe defenses to direct price discrimination under the Robinson-Patman Act.

Question 47

If one automobile firm merges with another automobile firm it is called a:

A)push down merger.
B)vertical merger.
C)conglomerate merger.
D)horizontal merger.