Question 1

Tying contracts are illegal under the:

Accepted Answer

Tying contracts, which require a buyer to purchase one product or service in order to get access to another product or service, are considered anticompetitive and are prohibited under Section 3 of the Clayton Act of 1914. The Wagner Act of 1935 established the National Labor Relations Board and protected the rights of employees to collective bargaining. The FTC Act of 1914 created the Federal Trade Commission to investigate and prevent unfair methods of competition in commerce. The Celler-Kefauver Act of 1950 was a merger control law that expanded the Clayton Act to cover asset acquisitions as well as stock acquisitions.

Question 2

A function of the Federal Trade Commission is to:

Accepted Answer

The Federal Trade Commission investigates instances of faulty and misleading advertising to protect consumers and promote fair competition.

Question 3

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

Accepted Answer

This arrangement is an example of a tying contract, where a product is offered on the condition that the buyer also purchases a separate product from the same seller. In this case, Slow Ketchup is tying the purchase of their main product with the purchase of their new sales product.

Question 4

All of the following can file antitrust charges under the Sherman Act except:

Accepted Answer

The Federal Energy Regulatory Commission does not have the authority to file antitrust charges under the Sherman Act. The other options listed, including the U.S. Justice Department, state attorneys general, and injured private parties, can all file such charges.

Question 5

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

Accepted Answer

The Sherman Act of 1890 made monopoly and restraints of trade criminal offenses against the federal government. The Clayton Act of 1914 and the Wheeler-Lea Act of 1938 strengthened the Sherman Act's provisions and expanded the government's power to regulate anti-competitive practices. The Celler-Kefauver Act of 1950 focused on preventing anti-competitive mergers and acquisitions.

Question 6

The Sherman Act was designed to:

Accepted Answer

The Sherman Act was designed to make monopoly and acts that restrain trade illegal.

Question 7

Which of the following laws prohibited mergers by stock acquisition if the effect was to lessen competition?

Accepted Answer

The answer of Which of the following laws prohibited mergers...

Question 8

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

Accepted Answer

Section 1 of the Sherman Act prohibits agreements between competitors that unreasonably restrain trade. In this case, the producers' agreement to stagger the release of their films could be seen as an attempt to reduce competition and limit consumer choice, which would be a violation of Section 1. Section 2 of the Sherman Act prohibits monopolization or attempts to monopolize a market, which does not seem to apply in this scenario. The Clayton Act and Federal Trade Commission Act also contain antitrust provisions, but they are typically used in different types of cases.

Question 9

The Clayton Act of 1914:

Accepted Answer

The Clayton Act of 1914 outlawed price discrimination, tying contracts, acquisition of stocks of competing corporations, and interlocking directorates that lessen competition. It also established the Federal Trade Commission to enforce the provisions of the act. Option B is referring to the Federal Trade Commission Act of 1914, option C is not entirely correct as vertical and conglomerate mergers are not outright outlawed, and option D is referring to the Clayton Antitrust Act of 1914, not the Clayton Act.

Question 10

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Accepted Answer

Options A, B, and D are all examples of behavior that could violate antitrust laws. Specifically, option A involves collusion among competitors to set prices, which violates both the Sherman and Clayton Acts. Option B involves a merger that would reduce competition in the market, which could also violate these laws. Option D describes a situation in which a dominant firm uses its power in one market to force customers to buy its product in a different market, which is known as tying and can be illegal under certain circumstances.

Option C, in contrast, does not involve any collusion or merger that would reduce competition in the market. While differential pricing strategies can sometimes raise antitrust concerns, the fact that firms in this scenario are independently choosing to offer lower prices to frequent customers does not necessarily violate the Sherman or Clayton Acts.

Question 11

Which one of the following is not prohibited by the original Clayton Act?

Accepted Answer

The original Clayton Act, enacted in 1914, specifically targeted anticompetitive practices that were not adequately addressed by the Sherman Antitrust Act. It prohibited certain actions such as price discrimination (D), exclusive dealings (C), and the purchase of stock in competing companies (A) when such actions would lessen competition or create a monopoly. However, the purchase of the assets of rival firms (B) was not explicitly addressed in the original act; this aspect has been covered more thoroughly in later amendments and other antitrust laws.

Question 12

Tying agreements:

Accepted Answer

Tying agreements involve a situation where the sale of one product (the tying product) is conditioned on the purchase of a second, distinct product (the tied product). This means that to buy product X, the purchaser is also required to buy product Y from the same seller.

Question 13

Which one of the following acts declared "[e]very contract,combination ...or conspiracy,in restraint of trade or commerce among the several states ...to be illegal"?

Accepted Answer

The quote provided is from the Sherman Antitrust Act of 1890, which declared contracts, combinations, and conspiracies in restraint of trade to be illegal.

Question 14

Responsibility for enforcing the antitrust laws rests:

Accepted Answer

Both the Department of Justice and the Federal Trade Commission share the responsibility for enforcing the antitrust laws. The Department of Justice is responsible for criminal enforcement, while the Federal Trade Commission is responsible for civil enforcement.

Question 15

The Celler-Kefauver Act of 1950:

Accepted Answer

The Celler-Kefauver Act of 1950 prohibited any firm from acquiring the real assets of another firm where the effect was to lessen competition, thereby preventing vertical mergers that would lead to a reduction in competition. It did not modify patent legislation, declare all conglomerate mergers to be illegal, or prohibit firms from buying the stock of another firm.

Question 16

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Accepted Answer

The Wheeler-Lea Act of 1938 gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising. The Celler-Kefauver Act of 1950 addressed antitrust concerns related to mergers and acquisitions, the Clayton Act of 1914 addressed antitrust concerns related to monopolies, and the Sherman Act of 1890 prohibited certain business practices that restrict competition.

Question 17

The Celler-Kefauver Act of 1950:

Accepted Answer

The Celler-Kefauver Act of 1950 amended the Clayton Act, specifically to tackle the issue of mergers and acquisitions that would lessen competition. It gave the government more power to regulate and prevent these types of deals, hence promoting fair competition in the market. The act did not outlaw price-fixing, create the Civil Aeronautics Board, or amend the Sherman Act.

Question 18

Which of the following is directly illegal under the Sherman Act?

Accepted Answer

Price-fixing is directly illegal under the Sherman Act as it involves agreements between competitors to set prices at a certain level, which eliminates competition and harms consumers. Price discrimination, tying contracts, and interlocking directorates may also be illegal under certain circumstances, but are not directly prohibited by the Sherman Act.

Question 19

Suppose the courts declare that XYZ Corporation violated the antitrust laws and as a result the ABC Corporation lost $100 million of profits.XYZ Corporation will have to pay ABC Corporation a monetary award of:

Accepted Answer

Under U.S. antitrust laws, specifically the Clayton Act, a company found guilty of antitrust violations may be required to pay treble damages, which means three times the amount of the actual damages. Therefore, XYZ Corporation would have to pay ABC Corporation $300 million.

Question 20

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?

Accepted Answer

The Celler-Kefauver Act of 1950 amended the Clayton Act's prohibition against mergers that substantially lessen competition by expanding the definition of assets and allowing the government to block vertical and conglomerate mergers. It also shifted the burden of proof to merging parties to show that a proposed merger would not substantially lessen competition.

Quiz 20: Antitrust Policy and Regulation

Tying contracts are illegal under the:

A function of the Federal Trade Commission is to:

Suppose Slow Ketchup requires that,as a condition of purchase,all restaurants using its product must buy and make available its new sales product.This arrangement is an example of:

All of the following can file antitrust charges under the Sherman Act except:

Which of the following made monopoly and restraints of trade criminal offenses against the federal government?

The Sherman Act was designed to:

Which of the following laws prohibited mergers by stock acquisition if the effect was to lessen competition?

Movie producers A,B,and C secretly meet and agree to release their summer blockbuster films in sequence,rather than at the same time.The U.S.Justice Department learns of the agreement and files an antitrust suit.The federal government would most likely file charges under the:

The Clayton Act of 1914:

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

Which one of the following is not prohibited by the original Clayton Act?

Tying agreements:

Which one of the following acts declared "[e]very contract,combination ...or conspiracy,in restraint of trade or commerce among the several states ...to be illegal"?

Responsibility for enforcing the antitrust laws rests:

The Celler-Kefauver Act of 1950:

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

The Celler-Kefauver Act of 1950:

Which of the following is directly illegal under the Sherman Act?

Suppose the courts declare that XYZ Corporation violated the antitrust laws and as a result the ABC Corporation lost $100 million of profits.XYZ Corporation will have to pay ABC Corporation a monetary award of:

Which of the following amended the Clayton Act's prohibition against mergers that substantially lessen competition?