Question 1

The law firm of Smith,Brown,and Jones has just held a meeting in which the three partners decided that all fees charged by each of them will be $500 per hour with no exceptions.They also set nonnegotiable fees for such things as preparation of wills,real estate settlements,and other types of standard cases.In this scenario,Smith,Brown,and Jones

Accepted Answer

A) The firm has not colluded with anyone outside of its partnership, and the partners
may set prices for their services as they wish.
S) The firm has not colluded with anyone outside of its partnership, and the partners may set prices for their services as they wish.
T) The firm has not colluded with anyone outside of its partnership, and the partners may set prices for their services as they wish.
U) The firm has not colluded with anyone outside of its partnership, and the partners may set prices for their services as they wish.

Question 2

The U.S.Supreme Court held that the Sherman Act applies to commercial agreements in which the parties acted in _______ manner.

Accepted Answer

A) The Supreme Court held that the statute applies only to parties that have acted in
an unreasonable manner.
B) The Supreme Court held that the statute applies only to parties that have acted in an unreasonable manner.
C) The Supreme Court held that the statute applies only to parties that have acted in an unreasonable manner.
D) The Supreme Court held that the statute applies only to parties that have acted in an unreasonable manner.

Question 3

Modern antitrust law's focus is on

Accepted Answer

A) Modern antitrust law is concerned with protecting the competitive process.
P) Modern antitrust law is concerned with protecting the competitive process.
Q) Modern antitrust law is concerned with protecting the competitive process.
R) Modern antitrust law is concerned with protecting the competitive process.

Question 4

Joe and Arthur each own a chain of restaurants.In order to ensure successful restaurants,Joe and Arthur enter into an agreement that Joe will open his new locations in Kansas City but not St.Louis and Arthur vice versa.This is an example of

Accepted Answer

A) This is an example of market allocation because each owner is agreeing on
limiting his market.
A) This is an example of market allocation because each owner is agreeing on limiting his market.
B) This is an example of market allocation because each owner is agreeing on limiting his market.
C) This is an example of market allocation because each owner is agreeing on limiting his market.

Question 5

Which economist/philosopher is cited in support of frequent meetings being circumstantial evidence of anticompetitive collusion?

Accepted Answer

A) Smith's Wealth of Nations is the source typically cited for this proposition.
B) Smith's Wealth of Nations is the source typically cited for this proposition.
C) Smith's Wealth of Nations is the source typically cited for this proposition.
D) Smith's Wealth of Nations is the source typically cited for this proposition.

Question 6

Vertical restraints are agreements between

Accepted Answer

A) Vertical restraints are agreements between noncompetitors.
A) Vertical restraints are agreements between noncompetitors.
B) Vertical restraints are agreements between noncompetitors.
C) Vertical restraints are agreements between noncompetitors.

Question 7

The Robinson-Patman Act makes it illegal for a business entity to discriminate in price "between different purchasers of commodities of like quality or grade." In order to violate this act,the business must

Accepted Answer

A) A violation of the Robinson-Patman Act requires that a business make two or
more sales to different purchasers at different prices.
G) A violation of the Robinson-Patman Act requires that a business make two or more sales to different purchasers at different prices.
H) A violation of the Robinson-Patman Act requires that a business make two or more sales to different purchasers at different prices.
I) A violation of the Robinson-Patman Act requires that a business make two or more sales to different purchasers at different prices.

Question 8

If there is no direct evidence of an agreement to manipulate the competitive market between two CEOs,a prosecutor may use their calendars and subsequent actions that were not in the usual course of business as circumstantial evidence to prove the _______ requirement of an antitrust violation.

Accepted Answer

A) Prosecutors may use circumstantial evidence to prove the necessary element of a
meeting of the minds.
A) Prosecutors may use circumstantial evidence to prove the necessary element of a meeting of the minds.
B) Prosecutors may use circumstantial evidence to prove the necessary element of a meeting of the minds.
C) Prosecutors may use circumstantial evidence to prove the necessary element of a meeting of the minds.

Question 9

Which of the following is not a type of horizontal restraint?

Accepted Answer

A) A tying agreement is a form of vertical restraint.
A) A tying agreement is a form of vertical restraint.
B) A tying agreement is a form of vertical restraint.
C) A tying agreement is a form of vertical restraint.

Question 10

When is a monopoly illegal under the Sherman Act?

Accepted Answer

A) Monopolies are illegal under the Sherman Antitrust Act when they are acquired or
maintained through prohibited conduct.
M) Monopolies are illegal under the Sherman Antitrust Act when they are acquired or maintained through prohibited conduct.
N) Monopolies are illegal under the Sherman Antitrust Act when they are acquired or maintained through prohibited conduct.
O) Monopolies are illegal under the Sherman Antitrust Act when they are acquired or maintained through prohibited conduct.

Question 11

Which act was designed to prevent monopolies from being created through mergers?

Accepted Answer

A) The Clayton Act was designed to prevent monopolies from being created through
mergers.
A) The Clayton Act was designed to prevent monopolies from being created through mergers.
B) The Clayton Act was designed to prevent monopolies from being created through mergers.
C) The Clayton Act was designed to prevent monopolies from being created through mergers.

Question 12

Horizontal restraints are agreements between

Accepted Answer

A) Horizontal restraints are agreements between competitors.
A) Horizontal restraints are agreements between competitors.
B) Horizontal restraints are agreements between competitors.
C) Horizontal restraints are agreements between competitors.

Question 13

Which act does the Robinson-Patman Act amend?

Accepted Answer

A) The Robinson-Patman Act amends the Clayton Act.
A) The Robinson-Patman Act amends the Clayton Act.
B) The Robinson-Patman Act amends the Clayton Act.
C) The Robinson-Patman Act amends the Clayton Act.

Question 14

Which of the following is an example of a tying agreement?

Accepted Answer

A) In a tying agreement, the buyer must purchase the second item in order to buy the
first.
V) In a tying agreement, the buyer must purchase the second item in order to buy the first.
W) In a tying agreement, the buyer must purchase the second item in order to buy the first.
X) In a tying agreement, the buyer must purchase the second item in order to buy the first.

Question 15

Which of the following agencies enforces federal antitrust laws?

Accepted Answer

A) The FTC enforces various antitrust laws.
A) The FTC enforces various antitrust laws.
B) The FTC enforces various antitrust laws.
C) The FTC enforces various antitrust laws.

Question 16

The University of Dover and Dover University are bitter cross-town rivals.They compete in everything from sports to academics.Because of shrinking enrollment,the schools make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester.This action would be considered

Accepted Answer

A) This is a meeting of the minds to commit a horizontal restraint of trade.
A) This is a meeting of the minds to commit a horizontal restraint of trade.
B) This is a meeting of the minds to commit a horizontal restraint of trade.
C) This is a meeting of the minds to commit a horizontal restraint of trade.

Question 17

There are two ice cream stands at the same intersection.In order to protect their businesses,the two owners agree that they will charge their customers the same prices for an ice cream cone.What type of horizontal restraint is this?

Accepted Answer

A) Price-fixing occurs when two or more parties agree on a price for certain goods.
A) Price-fixing occurs when two or more parties agree on a price for certain goods.
B) Price-fixing occurs when two or more parties agree on a price for certain goods.
C) Price-fixing occurs when two or more parties agree on a price for certain goods.

Question 18

Which of the following is not one of the steps in a three-step test for attempted monopolization under the Sherman Act?

Accepted Answer

A) There is not a requirement that the entity form an agreement with others in order
to attempt to create a monopoly.
J) There is not a requirement that the entity form an agreement with others in order to attempt to create a monopoly.
K) There is not a requirement that the entity form an agreement with others in order to attempt to create a monopoly.
L) There is not a requirement that the entity form an agreement with others in order to attempt to create a monopoly.

Question 19

Which of the following was the first major antitrust law?

Accepted Answer

A) The Sherman Act came first, in 1890.
A) The Sherman Act came first, in 1890.
B) The Sherman Act came first, in 1890.
C) The Sherman Act came first, in 1890.

Question 20

In Texaco Inc.v.Dagher et al.,two oil refiners and gas suppliers,Texaco and Shell Oil,entered into a joint venture called Equilon to consolidate their operations in the western United States.Historically,Texaco and Shell were competitors,but for their joint venture they shared expenses and profits equally.The products produced by Equilon were sold under the brand names Texaco and Shell at a mutually agreed-upon price.Texaco and Shell retailers brought a class action lawsuit against the two companies,claiming there was a per se violation of the Sherman Antitrust Act because of the lack of price competition.The court held that

Accepted Answer

A) The court held that a market analysis was relevant and therefore a rule of reason standard should apply.
D) The court held that a market analysis was relevant and therefore a rule of reason standard should apply.
E) The court held that a market analysis was relevant and therefore a rule of reason standard should apply.
F) The court held that a market analysis was relevant and therefore a rule of reason standard should apply.

Quiz 19: Antitrust and Regulation of Competition