Question 1

When a firm agrees that goods sold or leased will be used only with other goods of the seller or lessor, that practice is called:

Accepted Answer

A tying agreement is an arrangement in which a seller agrees to sell or lease a product to a buyer only if the buyer agrees to buy or lease another product or service from the seller. This practice can be illegal under antitrust laws if it harms competition.

Question 2

Firms in an industry where economies of scale are sufficiently large that if two or more firms were to be involved in the production of the industry output, unit cost would be higher than for a monopoly are called:

Accepted Answer

Natural monopolies exist when economies of scale are so large that a single firm can produce the entire industry output at the lowest cost, and any additional firms entering the market would face higher unit costs, making it difficult for them to compete with the existing firm. Thus, natural monopolies have a significant advantage over other firms in the industry, making it difficult for new competitors to enter.

Question 3

In today's business environment, the largest volume of tort cases occurs in the area of:

Accepted Answer

Negligence is a common cause of tort cases in the business environment. This is when a person or entity is accused of failing to exercise reasonable care, resulting in harm or injury to another party. Cases involving premises liability, product liability, and professional malpractice often fall under negligence.

Question 4

Punitive damages:

Accepted Answer

Punitive damages are excess damages sought in order to punish the wrongdoer and are generally not awarded in breach of contract cases. They are awarded in cases of intentional or malicious behavior, and are meant to deter similar behavior in the future.

Question 5

Anti-trust law pertains to:

Accepted Answer

Anti-trust law specifically regulates business practices and agreements that may give rise to monopoly power or restrict trade, in order to promote competition and protect consumers. The other choices are too broad or not directly related to anti-trust law.

Question 6

The practice of a group of firms agreeing to set the price if a final or intermediate product at a specific level is called:

Accepted Answer

Price fixing is the practice of collusion among firms to set prices at a specific level for a product or service. It is illegal and considered a violation of antitrust laws.

Question 7

A binding agreement between two or more parties wherein one of the parties is obliged to do or refrain from doing a specific act and the obligation incurred is recognized or enforced by law is called an):

Accepted Answer

A contract is a binding agreement between parties that can be enforced by law. The other options either do not fully encompass the definition of a contract or are unrelated.

Question 8

Laws enacted to preserve competition and prevent the concentration of economic power in one or a firms are commonly called:

Accepted Answer

Antitrust laws are specifically enacted to prevent the concentration of economic power in one or a few firms and preserve competition. Business practice laws, criminal laws, contract laws, and tort laws may have some relevance to preserving competition, but they are not specifically focused on this goal.

Question 9

Remedies for "breach of contract" ordinarily include all of the following EXCEPT:

Accepted Answer

Suing for punitive damages is not a typical remedy for breach of contract. Punitive damages are awarded in cases where the defendant's actions were intentionally malicious or fraudulent, which is not the case in most breach of contract situations.

Question 10

Public utility regulator's instructions to use price discrimination or block pricing is designed to:

Accepted Answer

The answer of Public utility regulator's instructions to use price...

Question 11

The major determinations to be made in negligence cases include all of the following EXCEPT:

Accepted Answer

The major determinations to be made in negligence cases include whether the defendant was negligent, whether there was contributory negligence on the part of the plaintiff/plaintiffs, and what is the extent of the injury. Justification for the defendant's acts is not typically considered as a factor in determining negligence.

Question 12

When a firm buying or leasing the goods of one firm agrees not to deal with competing suppliers, that practice is called:

Accepted Answer

Exclusive dealing is when a firm agrees to buy or lease goods exclusively from one supplier and not from competing suppliers. This can create barriers to entry for other suppliers and reduce competition in the market.

Question 13

Natural monopolies are often found in the all of the following industries EXCEPT:

Accepted Answer

Petroleum refining and marketing is not typically considered a natural monopoly as there is usually competition in these markets. The other industries listed often have high fixed costs and barriers to entry that make it difficult for multiple firms to operate efficiently in the market, resulting in a single dominant firm or natural monopoly.

Question 14

The major determinations to be made in negligence cases include all of the following EXCEPT:

Accepted Answer

The major determinations to be made in a negligence case include the determination of the defendant's negligence, the presence or absence of contributory negligence on the part of the plaintiff or plaintiffs, and the extent of injury suffered by the plaintiff or plaintiffs. The determination of justification for the defendant's acts is not typically relevant in a negligence case.

Question 15

"Per se" violations of U.S. federal antitrust laws include all of the following business practices EXCEPT:

Accepted Answer

price discrimination is not always a violation of antitrust laws, as there are certain circumstances where it is allowed under the Robinson-Patman Act. However, price fixing, division of markets, tying agreements, and group boycotts are all per se violations of U.S. federal antitrust laws.

Question 16

Which of the following statements is TRUE regarding the penalties for violations of the antitrust laws?

Accepted Answer

Penalties for violation of the antitrust laws can be quite severe with fines ranging up to $1,000,000. Additionally, prison sentences can be imposed for individual officers and employees involved in antitrust activities. The cost of defending a firm in an antitrust suit can be substantial, and the government does not necessarily provide representation. The antitrust laws do allow for treble or punitive damages in certain circumstances.

Quiz 16: Legal and Regulatory Environment of the Firm

When a firm agrees that goods sold or leased will be used only with other goods of the seller or lessor, that practice is called:

Firms in an industry where economies of scale are sufficiently large that if two or more firms were to be involved in the production of the industry output, unit cost would be higher than for a monopoly are called:

In today's business environment, the largest volume of tort cases occurs in the area of:

Punitive damages:

Anti-trust law pertains to:

The practice of a group of firms agreeing to set the price if a final or intermediate product at a specific level is called:

A binding agreement between two or more parties wherein one of the parties is obliged to do or refrain from doing a specific act and the obligation incurred is recognized or enforced by law is called an) :

Laws enacted to preserve competition and prevent the concentration of economic power in one or a firms are commonly called:

Remedies for "breach of contract" ordinarily include all of the following EXCEPT:

Public utility regulator's instructions to use price discrimination or block pricing is designed to:

The major determinations to be made in negligence cases include all of the following EXCEPT:

When a firm buying or leasing the goods of one firm agrees not to deal with competing suppliers, that practice is called:

Natural monopolies are often found in the all of the following industries EXCEPT:

The major determinations to be made in negligence cases include all of the following EXCEPT:

"Per se" violations of U.S. federal antitrust laws include all of the following business practices EXCEPT:

Which of the following statements is TRUE regarding the penalties for violations of the antitrust laws?