Deck 13: Antitrust and Regulation

Question 1

If two or more firms combine or conspire to monopolize trade, this would be in violation of the:

A) Federal Trade Commission Act.
B) Clayton Act.
C) Sherman Antitrust Act.
D) Robinson-Patman Act.

Answer 1

C

Question 2

Firms that place their assets in the custody of a board of trustees is called a(n):

A) utility.
B) oligopoly.
C) trust.
D) all of these.

Answer 2

C

Question 3

The Sherman Antitrust Act of 1890 is the federal antitrust law that prohibits:

A) monopolization and conspiracies to restrain trade.
B) mergers the substantially lessen competition.
C) exclusive dealing, tying contracts, and interlocking directorates.
D) unfair methods of competition in commerce.

Answer 3

A

Question 4

The first major piece of antitrust legislation was:

A) Clayton Act.
B) Celler-Kefauver Act.
C) Sherman Antitrust Act.
D) Rockefeller Act.
E) Robinson-Patman Act.

Question 5

Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?

A) Sherman Antitrust Act of 1890.
B) Clayton Act of 1914.
C) Federal Trade Commission Act of 1914.
D) Robinson-Patman Act of 1936.
E) Cell-Kefauver Act of 1950.

Question 6

A firm that places its assets in the custody of a board of trustees is called a:

A) trust.
B) combination.
C) cartel.
D) all of these.

Question 7

If two or more firms collude to fix prices, this would be outlawed by the:

A) Federal Trade Commission Act.
B) Clayton Act.
C) Robinson-Patman Act.
D) Sherman Antitrust Act.

Question 8

In order to obtain a conviction for price fixing under the Sherman Antitrust Act, the government needs to prove:

A) only that an attempt to fix prices was made.
B) that there was a price-fixing agreement that actually lessened competition.
C) that there was a high concentration ratio for the industry.
D) all of these.

Question 9

"Good" trusts were exempt from antitrust prosecution under the:

A) per se rule.
B) Sherman Act.
C) Clayton Act.
D) rule of reason.

Question 10

The Sherman Antitrust Act:

A) prohibited restraint of trade.
B) created the Federal Trade Commission.
C) prohibited fraudulent advertising.
D) regulated the railroads.

Question 11

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

A) Attempts to monopolize.
B) Price fixing.
C) Formation of cartels.
D) All of these are illegal under the Sherman Antitrust Act.

Question 12

The antitrust law that prohibits firms from combining or conspiring to restrain trade in interstate commerce is the:

A) Federal Trade Commission Act.
B) Clayton Act.
C) Sherman Antitrust Act.
D) Robinson-Patman Act.

Question 13

If one software company conspired with another software company to raise prices, this would be in violation of the:

A) Federal Trade Commission Act.
B) Clayton Act.
C) Sherman Antitrust Act.
D) Robinson-Patman Act.

Question 14

The purpose of antitrust laws is to:

A) reduce anticompetitive activities.
B) regulate electric companies.
C) guarantee worker safety.
D) promote quality products.

Question 15

The Sherman Antitrust Act was passed in:

A) 1890.
B) 1914.
C) 1929.
D) 1933.

Question 16

The first federal antitrust law was the:

A) Clayton Act.
B) Federal Trade Commission Act.
C) Sherman Antitrust Act.
D) Interstate Commerce Act.

Question 17

The practice of firms temporarily reducing prices in order to eliminate competition is called:

A) competitive pricing.
B) predatory pricing.
C) discount pricing.
D) strategic pricing.

Question 18

Competitive firms X, Y, and Z meet in secret and agree to charge the same price. The U.S. Justice Department discovers this agreement and would most likely file charges under the:

A) Clayton Act.
B) Federal Trade Commission Act.
C) Sherman Act.
D) Tying Contracts Act.

Question 19

What act of Congress declared restraint of trade illegal and declared any attempt at monopolizing unlawful?

A) Celler-Kefauver Act.
B) Sherman Antitrust Act.
C) Clayton Act.
D) Robinson-Patman Act.

Question 20

Officers of five large building-materials companies meet and agree than none of them will submit bids on government contracts lower than an agreed-upon level. This is an example of:

A) price fixing.
B) vertical restriction.
C) a tying contract.
D) an interlocking directorate.

Question 21

Campbell Soup agrees to sell its brand to a grocery chain only if the chain also agrees to buy a minimum number of cases of its V-8 juice. This is an example of:

A) a resale price maintenance agreement.
B) a tying agreement.
C) exclusive dealing.
D) price discrimination.

Question 22

If a firm has a tying agreement with a distributor which substantially lessens competition, then it is likely to be in violation of the:

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Interstate Commerce Act.

Question 23

The Sherman Antitrust Act:

A) prohibited restraint of trade.
B) created the Federal Trade Commission.
C) prohibited fraudulent advertising.
D) regulated the railroads.

Question 24

Which of the following is illegal under Clayton Act of 1914?

A) Charging different prices for the same product.
B) Exclusive dealer agreements.
C) Tying contracts.
D) The purchase of the assets of a rival firm that lessens competition.

Question 25

For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:

A) price discrimination.
B) a tying contract.
C) an interlocking directorate.
D) exclusive dealing.

Question 26

Which of the following describes a tying contract?

A) The seller of one product requires the buyer to purchase some other product(s).
B) One firm buys the stock of a competing firm.
C) The directors of one company serve on the board of directors of another company in the same industry.
D) An agreement between a manufacturer and a retailer based on the condition that the retailer is not to carry any rival products of the manufacturer.

Question 27

Interlocking directorates are illegal under the ____ whether or not the effect may be to substantially lessen competition.

A) Clayton Act
B) Robinson-Patman Act
C) Sherman Antitrust Act
D) Federal Trade Commission Act
E) Interstate Commerce Act

Question 28

A retailer cannot sell Campbell Soup if it also sells other brands of soup. This is an example of:

A) resale price maintenance.
B) price discrimination.
C) a tying agreement.
D) exclusive dealing.

Question 29

The Sherman Antitrust Act is primarily concerned with:

A) mergers.
B) nationalization.
C) price discrimination.
D) monopolization.
E) unfair and deceptive practices.

Question 30

Which of the following practices is prohibited by the Clayton Act?

A) Price discrimination that substantially lessens competition.
B) Tying contracts that substantially lessen competition.
C) Exclusive dealing that substantially lessens competition.
D) All of these.

Question 31

The most important weakness of the Sherman Antitrust Act was that:

A) the Supreme Court refused to enforce it.
B) it wasn't specific about the types of acts which would violate the law.
C) it didn't outlaw restraints of trade.
D) it was too complicated.
E) it was too specific.

Question 32

Price discrimination that tends to lessen competition is outlawed by the:

A) Sherman Antitrust Act.
B) Clayton Act.
C) Federal Trade Commission Act.
D) Interstate Commerce Act.

Question 33

Which act of Congress declared tying contracts, exclusive dealing, and price discrimination illegal?

A) Celler-Kefauver Act.
B) Sherman Antitrust Act.
C) Clayton Act.
D) Robinson-Patman Act.

Question 34

Which of the following is an amendment that strengthened the Sherman Antitrust Act?

A) Celler Kefauver Act.
B) Clayton Act.
C) Robinson-Patman Act.
D) Tyler Act.

Question 35

What act of Congress declared restraint of trade illegal and declared any attempt at monopolizing unlawful?

A) Celler-Kefauver Act.
B) Sherman Antitrust Act.
C) Clayton Act.
D) Robinson-Patman Act.

Question 36

If a firm acquires the stock of a competing firm that causes a substantial lessening of competition, it would be in violation of the:

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Interstate Commerce Act.

Question 37

The primary purpose of antitrust legislation is to:

A) protect small business.
B) protect the competitiveness of U.S. business.
C) protect the prices of American-made products.
D) ensure American labor is paid a fair wage.
E) ensure firms earn only a fair profit.

Question 38

Under the original Clayton Act, which of the following was not illegal?

A) Charging different prices for the same product.
B) Exclusive dealer agreements.
C) The purchase of the stock of a rival firm that lessens competition.
D) The purchase of the assets of a rival firm that lessens competition.

Question 39

The Clayton Act of 1914:

A) was too vaguely worded to reduce anticompetitive behavior significantly
B) prohibited conspiracies in restraint of trade
C) prohibited price discrimination that reduces competition and cannot be justified based on cost differences
D) created the Federal Trade Commission

Question 40

Which antitrust act prohibits exclusive dealing, tying contracts, stock acquisitions, and interlocking directorates?

A) Sherman Antitrust Act of 1890.
B) Clayton Act of 1914.
C) Federal Trade Commission Act of 1914.
D) Robinson-Patman Act of 1936.
E) Cell-Kefauver Act of 1950.

Question 41

Which two pieces of legislation were passed in 1914?

A) Sherman Antitrust and Clayton Act
B) Clayton Act and Robinson-Patman Act
C) Robinson-Patman Act and Celler-Kefauver Act
D) Clayton Act and Federal Trade Commission Act
E) Sherman Antitrust Act and Federal Trade Commission Act.

Question 42

A grocery store cannot sell Campbell Soup if it also sells other brands of soup. This is an example of:

A) resale price maintenance.
B) territorial restrictions.
C) a tying agreement.
D) exclusive dealing.

Question 43

Under the Clayton Act, horizontal mergers by stock acquisition were:

A) not considered.
B) illegal if they could be show to lessen competition.
C) illegal under any circumstances.
D) legal if they could be shown to lessen competition.

Question 44

Which of following is responsible for investigating fraudulent advertising? ​

A) ​Federal Reserve
B) ​Bureau of Standards
C) ​Federal Trade Commission
D) ​Department of Justice.

Question 45

Under the Clayton Act,

A) the same person cannot sit on the boards of directors of competing corporations.
B) mergers are illegal.
C) monopoly is illegal.
D) the Sherman Antitrust Act was repealed.

Question 46

Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?

A) Price discrimination.
B) Tying contract.
C) Horizontal mergers by stock acquisition.
D) Interlocking directorates.

Question 47

Which agency was created by Congress in 1914 to investigate and regulate unfair methods of competition?

A) Department of Justice.
B) Federal Trade Commission.
C) Interstate Commerce Commission.
D) General Accounting Office.

Question 48

An exclusive contract:

A) makes it illegal to price discriminate.
B) requires a buyer to purchase all products from a specified supplier.
C) requires a buyer not to purchase any requirements from the competitor of a specified supplier.
D) requires the buyer to purchase a second product as a condition of receiving the one he wants.
E) requires a seller to market its product within a limited geographic territory.

Question 49

The antitrust legislation that made it illegal for a firm to buy a competitor's voting stock was the:

A) Sherman Antitrust Act.
B) Celler-Kefauver Act.
C) FTC Act.
D) Robinson-Patman Act.
E) Clayton Act.

Question 50

Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of:

A) price discrimination.
B) exclusive dealing.
C) a tying contract.
D) interlocking directorates.

Question 51

The Clayton Act:

A) was passed in 1890.
B) created the Federal Trade Commission.
C) abolished antitrust policy in this country.
D) attempted to give explicit content to what formed an antitrust violation.
E) made mergers between corporations illegal.

Question 52

The first piece of antitrust legislation in the United States to deal with price discrimination was the:

A) Clayton Act.
B) FTC Act.
C) Celler-Kefauver Act.
D) Robinson-Patman Act.
E) Sherman Antitrust Act.

Question 53

The Federal Trade Commission is charged with:

A) supervising cartels in the United States.
B) aiding small business in contract negotiations with foreign companies.
C) investigating unfair and deceptive trade practices.
D) approving contracts between businesses and government.
E) bringing criminal complaints.

Question 54

A manufacturer will sell its product only to retailers who agree to buy its brand. This is an example of:

A) price discrimination.
B) exclusive dealing.
C) a tying contract.
D) interlocking directorates.

Question 55

Today, the Federal Trade Commission (FTC) is concerned with:

A) enforcing consumer protection legislation.
B) prohibiting deceptive advertising.
C) preventing collusion.
D) all of these.

Question 56

The importance of the Federal Trade Commission Act of 1914 is that it:

A) set up an independent antitrust agency with the power to bring court cases.
B) strengthened the law against mergers.
C) strengthened the law against price discrimination.
D) all of these.

Question 57

Which of the following was not illegal under the original Clayton Act?

A) Tying contracts.
B) Interlocking directorates.
C) Merger by purchase of assets with cash.
D) All of these were illegal under the original Clayton Act.

Question 58

Which of the following is not one of the four anti-competitive activities outlined in the Clayton Act?

A) Price discrimination.
B) Exclusive buyer/seller contracts.
C) Buying a competitor's voting stock.
D) Buying a competitor's plants and equipment.
E) Interlocking boards of directors.

Question 59

The Federal Trade Commission Act was passed in:

A) 1890.
B) 1914.
C) 1929.
D) 1933.

Question 60

The Clayton Act was passed in:

A) 1887.
B) 1890.
C) 1914.
D) 1936.
E) 1952.

Question 61

Which of the following is often called the "Antimerger Act"?

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Celler-Kefauver Act.

Question 62

If a firm offers quantity discounts or special promotional allowances only to favored distributors and the effect is to substantially lessen competition, then it is in violation of the:

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Celler-Kefauver Act.

Question 63

The Robinson-Patman Act is primarily concerned with:

A) mergers.
B) price fixing.
C) price discrimination.
D) monopoly.
E) unfair and deceptive practices.

Question 64

Which act of Congress extended the government's authority to block horizontal and vertical mergers?

A) Clayton Act.
B) Sherman Antitrust Act.
C) Celler-Kefauver Act.
D) Robinson-Patman Act.

Question 65

The Robinson-Patman Act amended and further refined which of the following laws?

A) The Sherman Antitrust Act.
B) The Celler-Kefauver Act.
C) The Clayton Act.
D) The FTC Act.
E) The Herfindahl-Hirschman Act.

Question 66

If Microsoft merges with retail stores and computer makers, such that competition is substantially reduced, it would be in violation of the:

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Celler-Kefauver Act.

Question 67

The antitrust legislation that was designed to help small stores survive competition with large retail chains was the:

A) FTC Act.
B) Sherman Antitrust Act.
C) Celler-Kefauver Act.
D) Robinson-Patman Act.
E) Clayton Act.

Question 68

Which of the following U.S. antitrust laws prohibits mergers through the acquisition of a firm's assets if the merger would lessen competition?

A) Clayton Act.
B) Robinson-Patman Act.
C) Celler-Kefauver Act.
D) Sherman Antitrust Act.

Question 69

Which of the following is concerned primarily with price discrimination?

A) The Sherman Antitrust Act.
B) The Clayton Act.
C) The Robinson-Patman Act.
D) The Celler-Kefauver Act.

Question 70

The Robinson-Patman Act of 1936 amended the: ​

A) ​Sherman Act.
B) ​ Clayton Act.
C) ​ Federal Trade Commission Act.
D) ​ Wagner Act.

Question 71

Price discounts to selected buyers with the intent of driving out smaller competitors is:

A) widespread in all industries.
B) common in the retailing industry only.
C) illegal under the Robinson-Patman Act.
D) allowed if the four-firm concentration ratio is less than 50 percent.
E) beneficial to consumers in the long run.

Question 72

Which of the following is an amendment to the Clayton Act that strengthened it against price discrimination?

A) The Sherman Antitrust Act.
B) The Federal Trade Commission Act.
C) The Robinson-Patman Act.
D) The Celler-Kefauver Act.

Question 73

Which of the following would be illegal under the Robinson-Patman Act?

A) Ford and General Motors meet to fix the price of cars.
B) Computer makers form a cartel.
C) General Mills and Kelloggs decide to merge.
D) Exxon sells gas at a higher wholesale price to independent gas retailers than to Exxon retailers.
E) Exxon Oil and Mobil Oil elect the same person to their boards of directors.

Question 74

The purchase of the assets of one steelmaker by another steelmaker might be a violation of the:

A) Clayton Act.
B) Federal Trade Commission Act.
C) Celler-Kefauver Act.
D) Robinson-Patman Act.

Question 75

Which of the following antitrust laws broadened the list of illegal price discrimination practices and is often called the "Chain Store Act"?

A) The Clayton Act.
B) The Federal Trade Commission Act.
C) The Robinson-Patman Act.
D) The Celler-Kefauver Act.

Question 76

The Celler-Kefauver Act of 1950 amended the:​

A) ​Sherman Act.
B) Clayton Act.
C) ​Federal Trade Commission Act.
D) ​Wagner Act.

Question 77

The Celler-Kefauver Act of 1950: ​

A) ​amended the Sherman Act to outlaw price fixing where the effect is to lessen competition.
B) ​created the Interstate Commerce Commission.
C) ​ prohibited conglomerate mergers where the effect is to lessen competition.
D) ​prohibited a firm from acquiring the assets of another firm where the effect is to lessen competition.

Question 78

The Celler-Kefauver Act of 1950 amended the:

A) Sherman Antitrust Act.
B) Clayton Act.
C) Federal Trade Commission Act.
D) Robinson-Patman Act.

Question 79

The Federal Trade Commission:

A) was abolished by the Celler-Kefauver Act.
B) was established when the Antitrust Division of the Justice Department was eliminated.
C) largely deals with utility regulation.
D) is a weak and ineffective government agency.
E) investigates unfair and deceptive trade practices.

Question 80

If a firm engages in a merger that substantially reduces competition, then it would be in violation of the:

A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Antitrust Act.
D) Federal Trade Commission Act.
E) Celler-Kefauver Antimerger Act.