Question 1

Offers to sell the same goods to competing buyers at different prices that are never completed would not be considered price discrimination.

Accepted Answer

Price discrimination involves actual transactions where different prices are charged to different buyers for the same goods or services. Offers that are never completed do not constitute actual sales and therefore do not qualify as price discrimination.

Question 2

Antitrust laws prohibit farmers from belonging to cooperatives that set prices.

Accepted Answer

Antitrust laws, such as the Capper-Volstead Act in the United States, allow farmers to form cooperatives and collectively market their products, including setting prices, as a way to balance the power between individual farmers and larger agricultural businesses.

Question 3

Companies with monopoly power use their economic power to limit production and raise prices, thus harming the consumer, is an example of the ________ theory.

Accepted Answer

Economic theory explains how companies with monopoly power can use their economic power to limit production and raise prices, thus harming the consumer.

Question 4

In the text case Spirit Airlines Inc., v. Northwest Airlines Inc., in which Spirit Airlines claimed that Northwest Airlines lowered its prices on certain flights once Spirit Airlines began to compete, what was the result on appeal?

Accepted Answer

The answer of In the text case Spirit Airlines Inc.,...

Question 5

Per se violations cannot provide guidance to businesses as to what are acceptable and unacceptable business practices.

Accepted Answer

Per se violations are clear examples of conduct deemed illegal without the need for further investigation into their effects on competition, thus providing guidance to businesses on what practices to avoid.

Question 6

The Sherman Act attempts to stop trusts from unfairly restricting market competition and prohibits banks from loaning money to those who violate the Act.

Accepted Answer

The Sherman Act focuses on preventing anti-competitive practices and does not specifically address banks loaning money to violators of the Act. Its main purpose is to prohibit monopolistic behavior and ensure fair competition.

Question 7

Bid rigging has recently been removed from the category of price fixing, and is therefore legal.

Accepted Answer

Bid rigging is a form of price fixing and remains illegal under antitrust laws in many jurisdictions, as it involves conspiring to determine the winner of a bidding process, thereby undermining competition.

Question 8

________ theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic efficiency.

Accepted Answer

Chicago School theorists are known for advocating that the primary goal of antitrust laws should be to promote economic efficiency. They emphasize the importance of free markets and minimal government intervention in achieving efficient outcomes.

Question 9

A trust is a business arrangement in which stock owners appoint beneficiaries and place their securities with trustees, who manage the company and pay a share of their earnings to the stockholders.

Accepted Answer

The answer of A trust is a business arrangement in...

Question 10

The Clayton Act was enacted to exempt specific business practices from prosecution for antitrust violations.

Accepted Answer

The Clayton Act was enacted to prevent anticompetitive practices in their incipiency and to supplement the Sherman Antitrust Act by covering additional activities that could harm competition, not to exempt specific business practices from antitrust prosecution.

Question 11

Which of the following most closely states the purpose of enacting the Sherman Act?

Accepted Answer

The Sherman Act was enacted in 1890 to prevent anti-competitive practices, such as those carried out by trusts, which unfairly restricted market competition. Its main purpose was to preserve free and unfettered competition as the rule of trade.

Question 12

Any anticompetitive behavior not prohibited under the Sherman Act or the Clayton Act is permissible under federal law.

Accepted Answer

There are other federal laws and regulations, as well as state laws, that address anticompetitive behavior not specifically covered by the Sherman Act or the Clayton Act, making certain behaviors still impermissible under federal law.

Question 13

Antitrust law was created to encourage anticompetitive behavior among businesses based on the belief that such behavior would lead to greater efficiency.

Accepted Answer

Antitrust law was created to prevent anticompetitive behavior among businesses, aiming to promote competition and protect consumers from monopolistic practices.

Question 14

The Sherman Act applies to foreign companies that conduct business that affects U.S. commerce.

Accepted Answer

The Sherman Act applies to foreign companies if their activities have a substantial effect on U.S. commerce, under the principle of extraterritorial application of U.S. antitrust laws.

Question 15

When was the Interstate Commerce Act passed?

Accepted Answer

The Interstate Commerce Act was passed in 1887 to regulate the railroad industry and its monopolistic practices.

Question 16

In the text case United States v. Apple, Inc., which discussed whether Apple's agreement with five of the six major publishers in the United States setting higher prices for releases on Apple's "iBookstore violated antitrust laws, resulted in which ruling on appeal?

Accepted Answer

The court ruled that the agreement between Apple and the publishers constituted a horizontal price-fixing conspiracy, which is a violation of the Sherman Act. This decision was based on the finding that Apple had facilitated the publishers' collective effort to raise and fix the retail prices of e-books, which undermined competition.

Question 17

In enacting the Sherman Act, Congress did not specify which specific behaviors were prohibited.

Accepted Answer

The Sherman Act was written in broad terms, giving courts the responsibility to decide which behaviors constitute an illegal restraint of trade or an illegal monopoly.

Question 18

When was the Sherman Act enacted?

Accepted Answer

The Sherman Act, a foundational statute in United States antitrust law, was enacted in 1890.

Question 19

The Federal Trade Commission has been eliminated.

Accepted Answer

The Federal Trade Commission (FTC) has not been eliminated; it continues to operate as an independent agency of the United States government, responsible for enforcing civil U.S. antitrust law and promoting consumer protection.

Question 20

Group boycotts by which two or more competing sellers refuse to sell their products to a certain customer are generally per se violations of the Sherman Act.

Accepted Answer

Group boycotts by competing sellers to refuse selling to a certain customer are considered per se violations of the Sherman Act because they directly restrict competition and harm the market and consumers by limiting access to goods or services.

Quiz 47: Antitrust Law