Question 1

Which of the following is false regarding enforcement of the Sherman Act?

Accepted Answer

A)   Every person who makes any contract in violation of the Sherman Act is guilty of a felony.
B)   The limit on fines for a corporation found in violation of the Sherman Act is $10,000,000.
C)   The Sherman Act only applies to business practices that restrain trade or commerce only within the United States.
D)   The limit on fines for a person found in violation of the Sherman Act is $350,000.
E)   The courts have determined the Sherman Act to prohibit efforts by competitors to fix prices, restrict output, and exclude rival companies.

Question 2

Which of the following most closely states the purpose of enacting the Sherman Act?

Accepted Answer

A)   To stop trusts from unfairly restricting market competition.
B)   To stop trusts from acting inefficiently.
C)   To create exemptions from excessive government regulation in order to spur economic growth.
D)   To create government-sponsored monopolies to compete with powerful corporations.
E)   To regulate interstate commerce.

Question 3

Sea Turtles, Inc. sells its sea turtle bracelets to a local vendor for $7.50. It sells the exact same sea turtle bracelet to an out-of-state vendor for $15.00. This violates which of the following?

Accepted Answer

A)   Section 1 of the Sherman Act
B)   Section 2 of the Sherman Act
C)   Section 3 of the Sherman Act
D)   Section 2 of the Clayton Act
E)   Section 1 of the Clayton Act

Question 4

Certain business practices always hurt consumers and are known as what?

Accepted Answer

A)   Per se violations
B)   Purposeful violations
C)   Consumer protection violations
D)   Expedient violations
E)   Business contemplation violations

Question 5

Which of the following practices are not covered under the Sherman Act, but are identified by the Clayton Act?

Accepted Answer

A)   Attempts to monopolize
B)   Mergers
C)   Vertical price fixing
D)   Horizontal price fixing
E)   Bid rigging

Question 6

Which of the following prohibits anticompetitive mergers or acquisitions?

Accepted Answer

A)   Securities and Exchange Act
B)   Section 4 of the Clayton Act
C)   Section 10 of the Sherman Act
D)   Section 7 of the Clayton Act
E)   Section 7 of the Sherman Act

Question 7

Which of the following allows courts to inquire into the competitive effectives of a company's behavior to determine whether social benefits or positive effects on competition outweigh the harm of anticompetitive behavior?

Accepted Answer

A)   The purposeful availment rule
B)   The restraint of trade rule
C)   The anti-competitive rule
D)   The best-business defense rule
E)   The rule of reason analysis

Question 8

Companies with monopoly power use their economic power to limit production and raise prices, thus harming the consumer, is an example of the ________ theory.

Accepted Answer

A)   competition
B)   specialized
C)   economic
D)   production
E)   market

Question 9

Despite the implementation of antitrust laws, new conglomerate business called ________ have sprung up in Japan.

Accepted Answer

A)   "mergerites"
B)   cartels
C)   oligopolies
D)   Keiretsu
E)   monopolies

Question 10

[Adult Floaters] Adam and Zach are both involved in businesses that manufacture bathing suits with small personal flotation devices implanted to assist with swimming. They both ship the suits to different states around the country. Adam and Zach get together and decide to raise their prices. They decide that since they are the only two manufacturers of this type of suit, if they both stick together and raise prices to an agreed upon amount, then consumers will be forced to pay that amount. They want to make a lot of money before anyone else jumps into the market. Adam's disgruntled secretary finds out about the agreement and sends out letters to consumers revealing the agreement.
-Have Adam and Zach violated the Sherman Act?

Accepted Answer

A)   Yes, they violated Section 1.
B)   Yes, they violated Section 2.
C)   No, there is no violation because they are not engaged in intrastate commerce.
D)   No, there is no violation because they have not established a monopoly.
E)   No, there is no violation because at least three businesses must be involved in order to establish a violation of the Sherman Act.

Question 11

For purposes of determining the relevant market, the type of service Mateo provides would be referred to as which of the following markets?

Accepted Answer

A)   Product
B)   Consumer
C)   Offered
D)   Utilized
E)   Disputed

Question 12

Which of the following, under the Sherman Act, permits a defendant to offer justification for their per se violation?

Accepted Answer

A)   Quick-look
B)   Purposeful
C)   Justifiable
D)   Necessary
E)   Gracious

Question 13

What must a plaintiff prove to show a per se violation of the Sherman Act?

Accepted Answer

A)   That the prohibited conduct occurred.
B)   That the prohibited conduct occurred and the proper amount of economic harm.
C)   That there is an unambiguous presumption of unfair trust activity.
D)   That trust activity is likely to dilute efficiency among the competition.
E)   An amount of economic harm meeting standards set by the Sherman Act itself.

Question 14

In the text case United States v. Apple, Inc., which discussed whether Apple's agreement with five of the six major publishers in the United States setting higher prices for releases on Apple's "iBookstore violated antitrust laws, resulted in which ruling on appeal?

Accepted Answer

A)   The court, relying on Verizon Commc'ns Inc. v. Law Offices of Curtis V. 14 Trinko, ruled that the publishers had engaged in a horizontal price fixing conspiracy but that Apple was not liable because the price fixing was at a different level of competition.
B)   The court ruled that the agreement was a technically a horizontal price-fixing conspiracy but not a violation of the Sherman Act because the presence of a strong competitor justifies such an arrangement (the "strong competitor exemption") .
C)   The court ruled that the agreement was a horizontal price-fixing conspiracy and thus a violation of the Sherman Act.
D)   The court ruled that because the agreement was within a statutory exemption to antitrust laws, it was not illegal and Apple had not violated the Sherman Act.
E)   The court ruled that the newness of the market and few competitors necessitated some sort of price fixing to encourage efficiency in the market.

Question 15

The Sherman Act applies to foreign companies that conduct business that affects U.S. commerce.

Accepted Answer

A) True 
 B)False

Question 16

________ theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic efficiency.

Accepted Answer

A)   Chicago School
B)   Marxist School
C)   Efficiency School
D)   Competition School
E)   Surety School

Question 17

Mom and Pop's Print Shop, a small, family-owned business since 1962, discovers that the local branch of the largest printer in the country, Blinko's, is getting the same types of paper Mom and Pop's orders from the same supplier at a steeply discounted rate, allowing Blinko's to charge a steeply reduced price for their paper. If Mom and Pop's chose to bring an antitrust action, what type of injury would they allege?

Accepted Answer

A)   Primary-line injury
B)   Secondary-line injury
C)   Tertiary-line injury
D)   Sherman injury
E)   Price-war injury

Question 18

In the U.S. Supreme Court case Continental T.V. Inc., v. GTE Sylvania Inc., Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product. Which of the following was the result?

Accepted Answer

A)   The court upheld the continued used of the bright line per se rule of illegality for all vertical restrictions.
B)   That the rule-of-reason should always be applied when vertical restrictions are involved.
C)   That the rule-of-reason standard should be applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect.
D)   That a per se rule of illegality is applied in a vertical restriction case unless departure from the rule is justified based upon a demonstrable economic effect.
E)   That the per se rule of illegality is applied in a vertical restriction case only when a manufacturing defendant is involved; otherwise, the rule-of-reason test applies.

Question 19

The action taken by PWP Guitars in the previous question will be permitted if PWP Guitars can show which of the following?

Accepted Answer

A)   Their business will fail without the acquisition.
B)   Their business will become more efficient with the acquisition.
C)   Competition will not be harmed by their acquisition.
D)   Competition will be helped by their acquisition.
E)   Their competitors have acquiesced to the acquisition.

Question 20

Which of the following would correctly state an argument for antitrust laws given by traditional antitrust theorists?

Accepted Answer

A)   The purpose of antitrust law is to encourage economic efficiency.
B)   An accumulation of economic power can lead to an accumulation of political power, which leads to political consequences for consumers.
C)   Concentrated economic power does not necessarily lead to political consequences and companies should not be punished for their success.
D)   To foster competition, a few powerful sellers should dominate the economy.
E)   Great economic power leads to greater efficiency that translates to lower costs to consumers.

Exam 47: Antitrust Law

Certain business practices always hurt consumers and are known as what?

Correct Answer
verified

Sea Turtles, Inc. sells its sea turtle bracelets to a local vendor for $7.50. It sells the exact same sea turtle bracelet to an out-of-state vendor for $15.00. This violates which of the following?

Correct Answer
verified

In the text case United States v. Apple, Inc., which discussed whether Apple's agreement with five of the six major publishers in the United States setting higher prices for releases on Apple's "iBookstore violated antitrust laws, resulted in which ruling on appeal?

Correct Answer
verified

Correct Answer
verified

Despite the implementation of antitrust laws, new conglomerate business called ________ have sprung up in Japan.

Correct Answer
verified

Which of the following practices are not covered under the Sherman Act, but are identified by the Clayton Act?

Correct Answer
verified

Which of the following, under the Sherman Act, permits a defendant to offer justification for their per se violation?

Correct Answer
verified

Which of the following allows courts to inquire into the competitive effectives of a company's behavior to determine whether social benefits or positive effects on competition outweigh the harm of anticompetitive behavior?

Correct Answer
verified

For purposes of determining the relevant market, the type of service Mateo provides would be referred to as which of the following markets?

Correct Answer
verified

Which of the following prohibits anticompetitive mergers or acquisitions?

Correct Answer
verified

Which of the following would correctly state an argument for antitrust laws given by traditional antitrust theorists?

Correct Answer
verified

The Sherman Act applies to foreign companies that conduct business that affects U.S. commerce.

Correct Answer
verified

Companies with monopoly power use their economic power to limit production and raise prices, thus harming the consumer, is an example of the ________ theory.

Correct Answer
verified

In the U.S. Supreme Court case Continental T.V. Inc., v. GTE Sylvania Inc., Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product. Which of the following was the result?

Correct Answer
verified

________ theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic efficiency.

Correct Answer
verified

Which of the following is false regarding enforcement of the Sherman Act?

Correct Answer
verified

The action taken by PWP Guitars in the previous question will be permitted if PWP Guitars can show which of the following?

Correct Answer
verified

Correct Answer
verified

What must a plaintiff prove to show a per se violation of the Sherman Act?

Correct Answer
verified

Which of the following most closely states the purpose of enacting the Sherman Act?

Correct Answer
verified

Exam 47: Antitrust Law

Certain business practices always hurt consumers and are known as what?

Correct AnswerverifiedShow Answer

Sea Turtles, Inc. sells its sea turtle bracelets to a local vendor for $7.50. It sells the exact same sea turtle bracelet to an out-of-state vendor for $15.00. This violates which of the following?

Correct AnswerverifiedShow Answer

In the text case United States v. Apple, Inc., which discussed whether Apple's agreement with five of the six major publishers in the United States setting higher prices for releases on Apple's "iBookstore violated antitrust laws, resulted in which ruling on appeal?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Despite the implementation of antitrust laws, new conglomerate business called ________ have sprung up in Japan.

Correct AnswerverifiedShow Answer

Which of the following practices are not covered under the Sherman Act, but are identified by the Clayton Act?

Correct AnswerverifiedShow Answer

Which of the following, under the Sherman Act, permits a defendant to offer justification for their per se violation?

Correct AnswerverifiedShow Answer

Which of the following allows courts to inquire into the competitive effectives of a company's behavior to determine whether social benefits or positive effects on competition outweigh the harm of anticompetitive behavior?

Correct AnswerverifiedShow Answer

For purposes of determining the relevant market, the type of service Mateo provides would be referred to as which of the following markets?

Correct AnswerverifiedShow Answer

Which of the following prohibits anticompetitive mergers or acquisitions?

Correct AnswerverifiedShow Answer

Which of the following would correctly state an argument for antitrust laws given by traditional antitrust theorists?

Correct AnswerverifiedShow Answer

The Sherman Act applies to foreign companies that conduct business that affects U.S. commerce.

Correct AnswerverifiedShow Answer

Companies with monopoly power use their economic power to limit production and raise prices, thus harming the consumer, is an example of the ________ theory.

Correct AnswerverifiedShow Answer

In the U.S. Supreme Court case Continental T.V. Inc., v. GTE Sylvania Inc., Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product. Which of the following was the result?

Correct AnswerverifiedShow Answer

________ theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic efficiency.

Correct AnswerverifiedShow Answer

Which of the following is false regarding enforcement of the Sherman Act?

Correct AnswerverifiedShow Answer

The action taken by PWP Guitars in the previous question will be permitted if PWP Guitars can show which of the following?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What must a plaintiff prove to show a per se violation of the Sherman Act?

Correct AnswerverifiedShow Answer

Which of the following most closely states the purpose of enacting the Sherman Act?

Correct AnswerverifiedShow Answer

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