Question 1

A rule of reason analysis means that courts look at the facts surrounding an antitrust
claim before determining whether competition has been helped or hurt.

Accepted Answer

A) True 
 B)False

Question 2

Under the Robinson-Patman Act,a producer may not be able to charge one retailer a lower price than it charges another retailer just because the first retailer buys more merchandise.Volume discounts can be a violation of the Robinson-Patman because,according to the law:

Accepted Answer

A)  price discounts injure competition
B)  price discounts unfairly target urban areas
C)  price discounts give large volume retailers an advantage over small volume retailers
D)  price discounts unfairly target urban areas and price discounts give large volume retailers an advantage over small volume retailers
E)  price discounts injure competition and price discounts give large volume retailers an advantage over small volume retailersF) All of the above
G) A) and B)

Question 3

You own a hair salon in a college town.Because there is competition for customers,the salons have been in a price war.You invite all salon owners to your home.They decide that the price war is hurting everyone and agree to charge standard rates for hairstyling.This arrangement is:

Accepted Answer

A)  legal because it was a voluntary arrangement
B)  legal because the price of styling hair is too low to be subject to the antitrust laws
C)  legal because it does not hurt competition
D)  legal under the rule of reason because the alternative,fewer salons,would mean less competition
E)  illegalF) A) and B)
G) None of the above

Question 4

Volume discounts are specified by the Robinson-Patman Act as exempt from
restrictions on price discrimination.

Accepted Answer

A) True 
 B)False

Question 5

The insurance industry is exempt from antitrust law so long as the states regulate it.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a provision of the Sherman Act:

Accepted Answer

A)  unfair methods of competition in or affecting commerce...are...unlawful
B)  it shall be unlawful for any person engaged in commerce...to discriminate in prices between purchasers of commodities of like grade and quality
C)  no corporation...shall acquire...another corporation...where...the effect of such acquisition may be substantially to lessen competition,or to tend to create a monopoly
D)  every contract,combination...or conspiracy,in restraint of trade...is illegal
E)  none of the other choices are a part of the Sherman ActF) B) and D)
G) A) and B)

Question 7

A merger occurs when:

Accepted Answer

A)  two or more firms agree to charge standard prices for their goods
B)  sales and manufacturing departments are combined
C)  common stock is converted to preferred stock
D)  sole proprietors decide to incorporate
E)  two or more firms join together to form a new entityF) A) and D)
G) D) and E)

Question 8

In U.S.Steel Corp.v.Fortner Enterprises,U.S.Steel loaned Fortner money to buy mobile homes from the company to put in his mobile home park,the Supreme Court held that it was:

Accepted Answer

A)  illegal for U.S.Steel to tie the sale of the homes to the financing
B)  an illegal boycott for U.S.Steel to refuse to lend the money once they sold the homes
C)  illegal for the homes to be sold with the financing since it created an exclusive deal
D)  not price discrimination under the Robinson-Patman Act to fix the home price together with the financing rate
E)  none of the other choicesF) A) and E)
G) C) and E)

Question 9

When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

Accepted Answer

A)  declaring the practice illegal per se
B)  declaring the practice legal per se
C)  using the rule of reason
D)  rejecting the rule of reason
E)  ignoring Congressional purpose behind the antitrust lawsF) A) and B)
G) A) and C)

Question 10

The Supreme Court holds that where monopoly power exists,tying arrangements are
legal as it helps to reduce monopoly power.

Accepted Answer

A) True 
 B)False

Question 11

The Clayton Act,the Sherman Act and the Federal Trade Commission Act are all examples of:

Accepted Answer

A)  state antitrust legislation
B)  federal antidiscrimination legislation
C)  federal employment legislation
D)  state employment legislation
E)  none of the other choices are correctF) A) and B)
G) B) and E)

Question 12

Charging different prices in different markets for the same goods is called:

Accepted Answer

A)  boycott pricing
B)  price discrimination
C)  price disparagement
D)  boycotting
E)  vertical discriminationF) C) and E)
G) D) and E)

Question 13

EU antitrust law applies to U.S.businesses that do business in Europe.

Accepted Answer

A) True 
 B)False

Question 14

The cost justification defense used by firms charged with violating Robinson-Patman:

Accepted Answer

A)  is often successfully applied
B)  must meet FTC vertical guideline standards
C)  is difficult to use because costs usually cannot be assigned to specific products sold to particular buyers
D)  all of the other specific choices
E)  none of the other choicesF) D) and E)
G) A) and D)

Question 15

Illegal boycotts may involve manufacturers getting together to tell dealers what to do.

Accepted Answer

A) True 
 B)False

Question 16

Vertical restraints of trade are arrangements between:

Accepted Answer

A)  manufacturers at the same level of production
B)  manufactures in the same geographical area
C)  distributors of the same size
D)  buyers and sellers
E)  small-sized sellers and large-sized sellersF) A) and E)
G) A) and D)

Question 17

Lobbying members of the legislature to seek special favors for a competitor does not
violate the antitrust laws.

Accepted Answer

A) True 
 B)False

Question 18

A practice of engaging in price discrimination in different markets in an attempt to undercut competitors is known as:

Accepted Answer

A)  boycotting
B)  the offense of meeting the competition
C)  retailer cartelization
D)  exclusive dealing
E)  none of the other choicesF) B) and E)
G) A) and B)

Question 19

The Clayton Act does not clearly restrict which of the following?

Accepted Answer

A)  unfair methods of competition
B)  tying arrangements
C)  mergers found to substantially lessen competition
D)  interlocking directorates
E)  all of the other choices are restrictedF) A) and E)
G) A) and D)

Question 20

When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

Accepted Answer

A)  declaring the practice illegal per se
B)  declaring the practice legal per se
C)  ignoring Congressional purpose behind the antitrust laws
D)  rejecting the rule of reason
E)  none of the other choicesF) A) and C)
G) A) and D)

Exam 20: Antitrust Law

Charging different prices in different markets for the same goods is called:

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The Supreme Court holds that where monopoly power exists,tying arrangements are legal as it helps to reduce monopoly power.

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Under the Robinson-Patman Act,a producer may not be able to charge one retailer a lower price than it charges another retailer just because the first retailer buys more merchandise.Volume discounts can be a violation of the Robinson-Patman because,according to the law:

Correct AnswerverifiedShow Answer

Volume discounts are specified by the Robinson-Patman Act as exempt from restrictions on price discrimination.

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In U.S.Steel Corp.v.Fortner Enterprises,U.S.Steel loaned Fortner money to buy mobile homes from the company to put in his mobile home park,the Supreme Court held that it was:

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Which of the following is a provision of the Sherman Act:

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Lobbying members of the legislature to seek special favors for a competitor does not violate the antitrust laws.

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When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

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Illegal boycotts may involve manufacturers getting together to tell dealers what to do.

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The Clayton Act,the Sherman Act and the Federal Trade Commission Act are all examples of:

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When a court considers the net effect of a business practice that is being challenged in an antitrust case,it is:

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A practice of engaging in price discrimination in different markets in an attempt to undercut competitors is known as:

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Vertical restraints of trade are arrangements between:

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The cost justification defense used by firms charged with violating Robinson-Patman:

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A merger occurs when:

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The Clayton Act does not clearly restrict which of the following?

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A rule of reason analysis means that courts look at the facts surrounding an antitrust claim before determining whether competition has been helped or hurt.

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You own a hair salon in a college town.Because there is competition for customers,the salons have been in a price war.You invite all salon owners to your home.They decide that the price war is hurting everyone and agree to charge standard rates for hairstyling.This arrangement is:

Correct AnswerverifiedShow Answer

The insurance industry is exempt from antitrust law so long as the states regulate it.

Correct AnswerverifiedShow Answer

EU antitrust law applies to U.S.businesses that do business in Europe.

Correct AnswerverifiedShow Answer

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