Question 1

The Federal Trade Commission Act of 1914 is primarily concerned with:

Accepted Answer

The Federal Trade Commission Act of 1914 is primarily concerned with unfair methods of competition, including practices that might harm competition, deceive consumers, or unfairly disadvantage competitors. While it also gives the FTC authority to review mergers that might substantially lessen competition, this is just one aspect of the Act's broader concern with promoting fair competition and protecting consumers. The Act also prohibits false advertising, deceptive labeling, and other forms of unfair or deceptive business practices. While price-fixing and conspiracies in restraint of trade are prohibited under the antitrust laws, these typically fall under the purview of the Sherman Act, not the FTC Act specifically.

Question 2

The ____ prohibits exclusive dealing contracts.

Accepted Answer

The Clayton Act prohibits exclusive dealing contracts, along with other anti-competitive practices such as price discrimination and tying arrangements. The Antimerger Act, Magnuson-Moss Act, Wheeler-Lea Amendment, and Federal Trade Commission Act do not specifically address exclusive dealing contracts.

Question 3

The Robinson-Patman Act specifically aims at:

Accepted Answer

The Robinson-Patman Act is also known as the Anti-Price Discrimination Act. Therefore, the act specifically aims at price discrimination, or charging different prices for the same product to different customers. It was designed to prevent larger companies from using their size and buying power to negotiate lower prices from suppliers, and then using these savings to undercut smaller competitors.

Question 4

American economic and legislative thinking is based on the idea that

Accepted Answer

American economic and legislative thinking is based on the idea that competition among many small firms helps the economy. This is because it promotes innovation, efficiency, and lower prices. The government encourages competition through antitrust laws and regulations to prevent the formation of monopolies and promote fair market competition.

Question 5

Which of the following U.S. antimonopoly laws deals with "tying contracts" where the sale of one product is contingent on the business customer purchasing other products from the same supplier?

Accepted Answer

The Clayton Act of 1914 specifically deals with tying contracts, also known as tying arrangements or tying clauses, which are used to force customers to buy additional products or services from the same supplier. The act prohibits tying for the purpose of creating a monopoly or unfairly limiting competitors.

Question 6

The Federal Trade Commission Act of 1914 focuses on:

Accepted Answer

The Federal Trade Commission Act of 1914 focuses on preventing unfair methods of competition, such as deceptive advertising or price fixing. It does not specifically address mergers, product warranties, tying contracts, or attempts to monopolize.

Question 7

The _____ environment sets the basic rules for how a business can operate in society.

Accepted Answer

The legal environment encompasses the laws, regulations, and guidelines that businesses must adhere to, including those related to employment, advertising, consumer protection, and product safety. Legal requirements set the basic rules for how a business can operate in society. The failure to comply with these laws can result in legal penalties or damage to a company's reputation.

Question 8

Which of the following U.S. antimonopoly laws deals with conspiracy to fix prices?

Accepted Answer

The Sherman Act of 1890 is the U.S. antimonopoly law dealing with conspiracy to fix prices. It prohibits agreements among competitors to fix prices, rig bids, or engage in other anticompetitive behavior.

Question 9

A firm that discriminates in price on goods of "like grade and quality" may be in violation of the ___________ Act.

Accepted Answer

The Robinson-Patman Act prohibits price discrimination between purchasers of commodities of like grade and quality where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly.

Question 10

The Clayton Act is NOT concerned with:

Accepted Answer

The Clayton Act primarily focuses on preventing anti-competitive practices such as price discrimination, exclusive dealing contracts, and tying contracts. It is not concerned with product warranties, which fall under consumer protection laws. The act aims to promote fair competition and protect small businesses from unfair practices.

Question 11

The early antimonopoly (or "procompetition") laws passed in the United States:

Accepted Answer

The early antimonopoly laws passed in the United States include the Federal Trade Commission Act and the Clayton Act, and began with the Sherman Act in 1890. These laws do affect the 4Ps and marketing mix planning, as companies must be careful not to engage in anticompetitive practices. However, the primary focus of these laws is to protect competition rather than individual consumers. All of these statements are correct, making E the best choice.

Question 12

The _____ _____ prohibits monopoly or conspiracy in restraint of trade.

Accepted Answer

The Sherman Antitrust Act, passed in 1890, prohibits monopolies or conspiracies that restrict trade. It is the oldest and most basic antitrust law in the United States.

Question 13

The Sherman Act and the Clayton Act:

Accepted Answer

The Sherman Act and the Clayton Act were both designed to promote competition and prevent monopolies, not protect large producers or limit competition. They were also both passed in the late 1800s and early 1900s, well before the rash of corporate takeovers in the 1980s.

Question 14

The Clayton Act specifically aims at:

Accepted Answer

The Clayton Act is aimed at various anti-competitive practices, including tying contracts, price discrimination by manufacturers, and exclusive dealing contracts that limit a buyer's sources of supply. Therefore, all of the choices are correct.

Question 15

When Acme Tools was found guilty of giving one of its retailers lower prices on goods of "like grade and quality" without any cost justification, the firm was charged with a violation of the ___________.

Accepted Answer

The Robinson-Patman Act prohibits price discrimination when selling "like grade and quality" goods to different purchasers without any cost justification. In this case, Acme Tools was found guilty of violating this act by giving lower prices to one of its retailers without any justification. The other options, Sherman Act, Clayton Act, Antimerger Act, and Wheeler-Lea Amendment, do not apply to this specific case.

Question 16

The Sherman Act sought to:

Accepted Answer

The Sherman Act was passed in 1890 to prevent monopolies or conspiracies in restraint of trade, making choice A the correct option. The other choices are incorrect as they do not relate to the purpose of the Sherman Act.

Question 17

The Sherman Act and the Clayton Act:

Accepted Answer

The Sherman Act (1890) and the Clayton Act (1914) were both antitrust laws aimed at promoting fair competition for the benefit of consumers, protecting small producers from being squeezed out by larger competitors, and preventing efforts to restrain trade or lessen competition. Both were indeed passed before the Depression of the 1930s, making all the given statements correct.

Question 18

The Sherman Act and the Federal Trade Commission Act:

Accepted Answer

The FTC Act focuses on stopping deceptive business practices, while the Sherman Act focuses on controlling monopolies. Both acts were passed to protect consumers from abuses by businesses, rather than to protect specific businesses from others who had an "unfair" advantage. Option A is untrue, as the acts were not intended to make it difficult for small companies to win customers from large companies. Option B is incorrect, as there are penalties for violations of both acts. Option D is false as the Sherman Act and the FTC Act are two separate laws.

Question 19

The Sherman Act is primarily designed to:

Accepted Answer

The Sherman Act is the primary federal statute that prohibits monopolies or conspiracies in restraint of trade. Its purpose is to maintain competition in the marketplace and prevent businesses from monopolizing a particular industry.

Question 20

American legislative and economic thinking assumes that:

Accepted Answer

American legislative and economic thinking generally supports the idea that competition among many small firms helps to drive innovation, improve quality, and keep prices low for consumers. This reflects a belief in the benefits of free market competition and a skepticism of excessive government intervention in the economy.

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment

The Federal Trade Commission Act of 1914 is primarily concerned with:

The ____ prohibits exclusive dealing contracts.

The Robinson-Patman Act specifically aims at:

American economic and legislative thinking is based on the idea that

Which of the following U.S. antimonopoly laws deals with "tying contracts" where the sale of one product is contingent on the business customer purchasing other products from the same supplier?

The Federal Trade Commission Act of 1914 focuses on:

The _____ environment sets the basic rules for how a business can operate in society.

Which of the following U.S. antimonopoly laws deals with conspiracy to fix prices?

A firm that discriminates in price on goods of "like grade and quality" may be in violation of the ___________ Act.

The Clayton Act is NOT concerned with:

The early antimonopoly (or "procompetition") laws passed in the United States:

The _ _ prohibits monopoly or conspiracy in restraint of trade.

The Sherman Act and the Clayton Act:

The Clayton Act specifically aims at:

When Acme Tools was found guilty of giving one of its retailers lower prices on goods of "like grade and quality" without any cost justification, the firm was charged with a violation of the ___________.

The Sherman Act sought to:

The Sherman Act and the Clayton Act:

The Sherman Act and the Federal Trade Commission Act:

The Sherman Act is primarily designed to:

American legislative and economic thinking assumes that: