1 The Federal Trade Commission Act prohibits unfair competition and deceptive practices; it
created the FTC to help enforce antitrust laws.
(A) True
(B) False
2 Which statement about merger investigation guidelines is not correct?
(A) The first step is to define the market where the merger is to take place and then the
concentration the merged firm will have.
(B) Competitive effects are investigated to ensure adequate competition will continue and that consumer
prices will not increase.
(C) The investigation includes a determination of the ease of entry into the market to maintain
competition.
(D) Merging partners have to specify efficiency gains and consumer benefits.
(E) Lastly, The FTC has to approve the merger.
3 _______ require judges to follow decisions of superior or previous courts.
(A) Legal precedents
(B) common law
(C) judicial consent
(D) judicial review
(E) adjudications
4 Past decisions of courts are referred to as ________.
(A) consent decrees
(B) legal precedent
(C) adjudications
(D) common law
(E) litigation determinations
5 _______occurs when a judge determines whether laws are legal under the Constitution or
whether officials have exceeded their authority.
(A) Constitutional amendment
(B) Congressional consent
(C) Judicial appointment
(D) Litigation determination
(E) Judicial review
6 _______ lawsuits are cases brought by a plaintiff against the government for failure to act
in accordance with its statutory obligations.
(A) Private
(B) Public
(C) Judicial
(D) Civil
(E) Criminal
7 Which of the following are true regarding antitrust laws?
(A) The Sherman Act prohibits unreasonable restraints of trade and monopolization.
(B) The Merger Improvement Act was passed to strengthen the other antitrust laws by requiring
premerger notification and approval, and it allowed states to sue businesses for price-fixing.
(C) The Clayton Act prohibits anticompetitive mergers, price discrimination, director interlock, and tying
contracts.
(D) The Federal Trade Commission Act protects unfair competition and deceptive practices.
(E) The Federal Trade Commission Act prohibits unfair competition and deceptive practices, and it created
the FTC to help enforce antitrust laws.
8 Which of the following are true about acquisitions and mergers?
(A) Acquisitions and mergers are similar in that they both occur when two companies combine.
(B) The primary difference between an acquisition and a merger is based on its organizational structures.
(C) Acquisitions commonly occur when a larger company buys a smaller firm.
(D) Mergers usually occur between two companies that are relatively equal in size.
(E) After a merger, the merged company cannot create a new company stock nor issue shares.
9 Which statements about mergers are true?
(A) Horizontal mergers combine two companies in the same industry, which are commonly
direct competitors.
(B) Vertical mergers combine two companies at different stages of the supply chain between raw
materials to delivery to consumers.
(C) A merger moving away from the consumer is a forward vertical merger, and moving closer to the
customer is a backward vertical merger.
(D) Conglomerate mergers combine a company with a firm in an unrelated industry.
(E) AT&T combined with T-Mobile to form the largest communications company in the U.S.
10 Which of the following is true regarding antitrust in federal court?
(A) Court opinions and decisions are unimportant because the law is slow to change.
(B) The courts determine whether companies are innocent or guilty of antitrust violations and determine
fines and damages paid to citizens and companies for their losses,
(C) The courts do not determine imprisonment nor whether to issue preliminary injunctions.
(D) Lawsuits must be tried before a jury.
(E) Lawsuits may be tried before a single judge, a panel of judges, or before a jury.
11 Which statements about types of laws, lawsuits, and courts and court functions are correct?
(A) The three basic types of laws are legislative, executive, and judicial.
(B) Civil suits are brought by the state or federal government against a defendant for a crime committed.
(C) There are three types of courts: federal, state, and local.
(D) The court has three major functions: law interpretation, litigation determination, and individual
protection.
(E) There are three types of lawsuits: criminal, civil, and public.
12 What is the purpose of antitrust laws, and what are three objectives of the laws?
Answer:
13 Discuss consequences of mergers and acquisitions (M&As).
Answer:
14 Some practices are not technically illegal, but they can become illegal when the intent is to
restrain trade and create a monopoly. Therefore, these practices are subject to antitrust
scrutiny. Discuss five of these practices.
Answer:
15 What is the first thing the DOJ and FTC do when investigating mergers?
Answer:
16 What are three types of lawsuits?
Answer:
17 Which statement about antitrust enforcement is not correct?
(A) The Department of Justice (DOJ) and Federal Trade Commission (FTC) investigate
allegations of antitrust violations, make settlements, and bring lawsuits against business.
(B) Very few lawsuits are brought to court by private citizens or companies who believe they were hurt by
antitrust practices, seeking compensation for damages.
(C) The DOJ and FTC also provide guidelines and advisory opinions, especially in merger investigations,
which they can prevent by filing a preliminary injunction.
(D) State attorneys general also investigate antitrust violations and file lawsuits against businesses,
sometimes in cooperation with the DOJ and FTC.
(E) The federal courts determine the outcomes of litigation, interpret the law, set precedents, and
approve consent decrees.
18 Which of the following practices are not technically illegal, but can become illegal when the
intent is to restrain trade and create a monopoly?
(A) Refusing to deal
(B) exclusive dealing
(C) backward marking
(D) resale price maintenance
19 The _______ includes firms at various stages of a production process, channel, or
distribution.
(A) supply account
(B) demand curve
(C) point of diminishing return
(D) ladder
(E) supply chain
20 The Sherman Antitrust Act requires premerger notification and approval, and it allows
states to sue businesses for price-fixing.
(A) True
(B) False
21 There are three types of mergers (and acquisitions): horizontal, vertical, and conglomerate.
(A) True
(B) False
22 When a company merges with another company, moving away from the customer, it makes
a forward vertical merger.
(A) True
(B) False
23 Exclusive territory occurs when a producer allows only one distributor to sell in an area.
(A) True
(B) False
24 Large companies are required by law to file a Premerger Notification and Report Form with
the DOJ and FTC of proposed mergers.
(A) True
(B) False
25 Although both the Department of Justice and the Federal Trade Commission are antitrust
enforcement agencies, only the Federal Trade Commission has an antitrust division.
(A) True
(B) False
26 Antitrust investigations closely examine competitive effects to ensure that adequate
competition will continue.
(A) True
(B) False
27 Antitrust laws are only at the federal level; states cannot have their own antitrust laws.
(A) True
(B) False
28 The Supreme Court can overturn statutes passed by Congress.
(A) True
(B) False
29 The U.S. District Courts are the trial courts of the federal court system.
(A) True
(B) False
30 Which of the following is not the objectives of the antitrust laws?
(A) To protect competition.
(B) To protect consumers.
(C) To encourage domination of one company over another.
(D) To protect small business from large businesses.
(E) To prevent predatory pricing.
31 The ________ Act prohibits anticompetitive mergers, price discrimination, director
interlock, and tying contracts.
(A) Clayton
(B) Sherman
(C) Federal Grace Commission
(D) Gramm-Rudman
(E) Roosevelt-Taft
32 ________occur when one company does not want to be acquired.
(A) Acquisition under duress
(B) Hostile takeovers
(C) Merger
(D) Integrated market merger.
(E) Vertical merger
33 A _______ is a combination of a company with another company in an unrelated industry.
(A) flat takeover
(B) hostile takeover
(C) conglomerate merger
(D) horizontal merger
(E) vertical merger
34 Of the three types of mergers, _______ tend to have the least potential for restraint of
trade and monopoly because the lines of business are different.
(A) hostile takeovers
(B) backward vertical merger
(C) forward vertical merger
(D) conglomerates
(E) forward vertical merger
35 List and describe the state court system (in order of hierarchy).
Answer: