Deck 22: Antitrust Law and Unfair Trade Practices

Question 1

The ________ is a federal statute,enacted in 1914,that regulates mergers and prohibits certain exclusive dealing arrangements.

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

Answer 1

D

Question 2

Government enforcement of federal antitrust laws is divided between the Antitrust Division of the Department of Justice and the Bureau of Competition of the Federal Trade Commission.

Answer 2

True

Question 3

A(n)________ is a type of plea where the defendant pays a penalty without admission of guilt.

A)nolo contendere
B)arraignment
C)indictment
D)plea bargain

Answer 3

A

Question 4

Federal antitrust laws provide only for government lawsuits.

Question 5

________ laws are a series of laws enacted to specifically limit anticompetitive behavior and monopolistic practices in almost all industries,businesses,and professions operating in the United States.

A)Contract
B)Antitrust
C)Laissez-faire
D)Canon

Question 6

________ damages are the only damages that may be recovered for violations of the Federal Trade Commission (FTC)Act.

A)Treble
B)Double
C)Potential
D)Actual

Question 7

The ________ is a federal statute,enacted in 1930,that prohibits price discrimination.

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

Question 8

The Clayton Act,enacted in 1914,regulates mergers and prohibits certain exclusive dealing arrangements.

Question 9

Antitrust defendants often opt to settle government-brought antitrust actions by entering a plea of nolo contendere.

Question 10

The Sherman Act is the only major antitrust act that includes criminal sanctions.

Question 11

A private plaintiff has ________ years from the date on which an antitrust injury occurred to bring a private civil treble-damages action because only damages incurred during this period are recoverable.

A)three
B)two
C)five
D)four

Question 12

The antitrust laws were enacted to promote anticompetitive behavior in commerce and industry.

Question 13

Private parties cannot intervene in public antitrust actions brought by the government.

Question 14

Treble damages cannot be sought for the violation of antitrust laws.

Question 15

The Federal Trade Commission (FTC)Act can be used to recover treble damages.

Question 16

Which of the following is considered an invalid antitrust injury?

A)lost profits
B)an increase in the cost of doing business
C)injury resulting from higher prices being "passed on"
D)a decrease in the value of tangible or intangible property caused by the antitrust violation

Question 17

The ________ is a federal statute,enacted in 1890,that makes certain restraints of trade and monopolistic acts illegal.

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

Question 18

The Robinson-Patman Act is a federal statute that makes it mandatory to provide a notification prior to a merger.

Question 19

Which of the following is the only act that includes criminal sanctions for unfair trade practices?

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

Question 20

Which of the following is true of antitrust laws?

A)Antitrust laws are fixed and unchangeable.
B)Private parties cannot intervene in public antitrust actions brought by the government.
C)Federal antitrust laws provide for government lawsuits and exclude private lawsuits from their purview.
D)Treble damages cannot be sought in antitrust lawsuits.

Question 21

The ________ is a federal statute,enacted in 1914,that regulates mergers and prohibits certain exclusive dealing arrangements.

Question 22

The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act is examined by applying the ________.

A)Colgate doctrine
B)Noerr doctrine
C)per se rule
D)rule of reason

Question 23

Price fixing is a ________ violation of Section 1 of the Sherman Act.

A)reasonable
B)per se
C)justifiable
D)permissible

Question 24

Restraints of trade that are unlawful under Section 1 of the Sherman Act only if their anticompetitive effects outweigh their procompetitive effects are known as ________.

A)nonprice vertical restraints
B)group boycotts
C)division of markets
D)the setting of minimum resale prices

Question 25

The two tests the U.S.Supreme Court has developed for determining the lawfulness of a restraint are the rule of reason and the ________.

A)Noerr doctrine
B)per se rule
C)nolo contendere rule
D)Colgate doctrine

Question 26

________ occurs when an independent choice is made by one party not to deal with another party.

A)A non-price vertical restraint
B)A monopoly to deal
C)A unilateral refusal to deal
D)Conscious parallelism

Question 27

Which of the following is true of price fixing?

A)It is a reasonable violation of Section 1 of the Sherman Act.
B)It is a process seen exclusively among sellers of goods and services.
C)It is permissible as it helps consumers or protects competitors from ruinous competition.
D)It includes fixing the quantity of a product or service to be produced or provided.

Question 28

Which of the following is true of the per se rule in restraint of trade?

A)It fails to permit any defenses and justifications to save the restraint of trade.
B)It applies only to restraints that are found to be unreasonable with certain evidentiary standards being met.
C)It applies to restraints that are based primarily on the firm's market share and power.
D)It requires a balancing of the positive and negative effects of the challenged restraint.

Question 29

________ is a restraint of trade in which competitors agree that each will serve only a designated portion of the market.

A)Resale market price maintenance
B)Profit sharing
C)Market sharing
D)Gain sharing

Question 30

Under the ________,the court must examine the pro- and anticompetitive effects of a challenged restraint.

A)Noerr doctrine
B)rule of reason
C)per se rule
D)consent decree

Question 31

A restraint of trade in which two or more competitors at one level of distribution agree not to deal with others at another level of distribution is known as ________.

A)group boycott
B)resale price maintenance
C)price fixing
D)market sharing

Question 32

Under ________ of the Clayton Act,any person who suffers antitrust injury in his or her business or property can bring a private civil action against the offenders.

Question 33

Which of the following is an example of a horizontal restraint of trade?

A)resale price maintenance
B)division of markets
C)unilateral refusal to deal
D)conscious parallelism

Question 34

Federal ________ law comprises several major statutes that prohibit certain anticompetitive and monopolistic practices.

Question 35

The rule of reason is characterized by ________.

A)an automatic violation of Section 1 of the Sherman Act
B)an inherently anticompetitive nature
C)a lack of need for any evidence to deem the restraint unreasonable
D)an evaluation of the company's market share,power,and other relevant factors

Question 36

Which of the following horizontal restraints of trade has the element of monopoly in it?

A)conscious parallelism
B)market sharing
C)group boycott
D)exchange of nonprice information

Question 37

A per se violation of Section 1 of the Sherman Act that occurs when a party at one level of distribution enters into an agreement with a party at another level to adhere to a price schedule that either sets or stabilizes prices is referred to as ________.

A)group boycotts
B)horizontal price fixing
C)resale price maintenance
D)nonprice vertical restraints

Question 38

Which of the following is an example of a vertical restraint of trade?

A)group boycott
B)price fixing
C)resale price maintenance
D)division of markets

Question 39

Three of the largest petroleum refineries in the country have come to an agreement about what price they would pay to purchase crude oil from sellers.This is an example of the ________.

A)sellers' illegal per se price fixing
B)sellers' illegal group boycott
C)buyers' illegal per se price fixing
D)buyers' illegal market sharing

Question 40

The ________ is a rule that is applicable to restraints of trade considered inherently anticompetitive.

A)consent decree
B)Noerr doctrine
C)per se rule
D)rule of reason

Question 41

A unilateral refusal to deal is a violation of Section 1 of the Sherman Act because there is a concerted action with others.

Question 42

Conscious parallelism occurs if two competing manufacturers of a similar product both separately reach an independent decision not to deal with a retailer.

Question 43

Conscious parallelism occurs when ________.

A)parties at different levels enter into an agreement to adhere to a price schedule that stabilizes prices
B)one party makes an independent choice not to deal with another
C)two or more firms act the same but no concerted action is shown
D)a party's anticompetitive effects outweigh its procompetitive effects

Question 44

Which of the following is true of the Colgate doctrine?

A)It is not a violation of Section 1 of the Sherman Act.
B)It is an example of a horizontal restraint of trade.
C)It is a per se violation of Section 1 of the Sherman Act.
D)It is a rule of reason violation of Section 1 of the Sherman Act.

Question 45

The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act is examined by using the rule of reason.

Question 46

________ is an antitrust principle which says that two or more persons can petition the executive,legislative,or judicial branch of the government or administrative agencies to enact laws or take other action without violating antitrust laws.

A)The Noerr doctrine
B)The Colgate doctrine
C)Nolo contendere
D)The de minimis exemption

Question 47

Which of the following is the rationale behind the Noerr doctrine?

A)state statutory law
B)the Uniform Commercial Code (UCC)
C)Article I of the U.S.Constitution
D)the Bill of Rights

Question 48

A relevant market is characterized by the presence of ________.

A)unique goods and services
B)reasonably interchangeable goods and services
C)highly differentiated goods and services
D)pure monopoly of the defendant's goods and products

Question 49

Competitors who agree that each will serve only a designated portion of the market are deemed to be engaging in a group boycott.

Question 50

The Noerr doctrine holds that two or more persons may petition the government to enact laws or take other action without violating antitrust laws.

Question 51

The setting of minimum resale prices is a rule of reason violation of Section 1 of the Sherman Act.

Question 52

The fact that price fixing helps consumers or protects competitors from ruinous competition can be used as a valid defense against the charge of price discrimination.

Question 53

The ________ rule is applicable to restraints of trade considered inherently anticompetitive.Once this determination is made about a restraint of trade,the court will not permit any defenses or justifications to save it.

Question 54

The per se rule is applicable to restraints of trade that are considered inherently anticompetitive.

Question 55

Restraints that are not characterized as per se violations are not further examined using the rule of reason.

Question 56

Group boycotts can be either a per se violation or rule of reason violation.

Question 57

Contracts,combinations,and conspiracies in restraint of trade are outlawed by Section 1 of the ________ Act.

Question 58

Price fixing is a rule of reason violation of Section 1 of the Sherman Act.

Question 59

Division of markets is considered to be a type of horizontal restraint of trade.

Question 60

Only price fixing conducted by sellers is considered a violation of Section 1 of the Sherman Act.

Question 61

What is a backward vertical merger?

A)a vertical merger between two or more companies that compete in the same business and geographical market
B)a vertical merger between two companies in similar fields whose sales do not overlap
C)a vertical merger in which a supplier acquires a customer
D)a vertical merger in which a customer acquires a supplier

Question 62

The ________ doctrine holds that two or more persons may petition the executive,legislative,or judicial branch of the government or administrative agencies to enact laws or to take other action without violating antitrust laws.

Question 63

Predatory pricing has been held to violate Section 2 of the Sherman Act.

Question 64

Which of the following is a defense to a charge of monopoly?

A)horizontal price fixing
B)natural monopoly
C)the setting of minimum resale prices
D)market sharing

Question 65

A merger between two or more companies that compete in the same business and geographical market is known as ________.

A)a horizontal merger
B)a vertical merger
C)a unilateral refusal to deal
D)conscious parallelism

Question 66

How is a relevant market identified by Section 2 of the Sherman Act?

Question 67

The ________ doctrine states that a firm can unilaterally choose not to deal with another party without being liable under Section 1 of the Sherman Act.

Question 68

Price fixing is a(n)________ violation of Section 1 of the Sherman Act.

Question 69

Predatory pricing,which is used to drive out competition,is in violation of the ________.

Question 70

The legality of nonprice vertical restraints of trade under Section 1 of the Sherman Act is examined by using the ________.

Question 71

Monopoly power is characterized by ________.

A)market share above 50 percent in the relevant market
B)market share above 60 percent in the non-relevant market
C)market share above 70 percent in the relevant market
D)market share above 80 percent in the non-relevant market

Question 72

Natural monopolies are found to violate Section 2 of the Sherman Act.

Question 73

The power of a firm to control prices or exclude competition,measured by the market share the defendant possesses in the relevant market,is known as ________.

Question 74

The relevant geographical market is always considered statewide.

Question 75

________ occurs when a party at one level of distribution enters into an agreement with a party at another level to adhere to a price schedule that either sets or stabilizes prices.

Question 76

Section 2 of the Sherman Act prohibits the act of monopolization.

Question 77

________ is a defense to a charge of monopolizing which recognizes that a small market can support only one competitor,such as a small-town newspaper.

Question 78

If two competing manufacturers of a similar product both separately reach an independent decision not to deal with a retailer,________ is said to have occurred,which is not a violation of Section 1 of the Sherman Act.

Question 79

Give an account of the Noerr doctrine.

Question 80

What is a vertical merger?

A)a merger between firms in totally unrelated businesses
B)a merger that integrates the operations of a supplier and a customer
C)a merger between two companies in similar fields whose sales do not overlap
D)a merger between two or more companies that compete in the same business and geographical market