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111. A firm's refers to the percentage of the relevant market controlled by the firm.
a. market power
b. profitability
c. market share
d. market proportion
e. market control
112. A firm's refers to the percentage of the relevant market controlled by the firm.
a. market power
b. profitability
c. market control
d. market proportion
e. none of the other choices are correct
113. A firm's market share refers to:
a. the number of products a firm produces
b. the percentage of the relevant market controlled by the firm
c. the ability of the firm to profitably to maintain prices above competitive levels for a significant period of time
d. the percentage of sales that a firm exports
e. the number of states a firm operates in
114. A firm's market share refers to:
a. the number of products a firm produces
b. the number of states a firm operates in
c. the ability of the firm to profitably to maintain prices above competitive levels for a significant period of time
d. the percentage of sales that a firm exports
e. none of the other choices are correct
115. In reviewing the competitive effects of mergers, which of the following may be considered?
a. product market
b. geographic market
c. market share
d. product market and geographic market
e. product market and geographic market and market share
116. When the impact of a merger of competitors on a geographic market is being considered, it:
a. must be the national market for federal purposes
b. must be a market in at least two states for it to be in interstate commerce under the statutes
c. can be a market in a small area and still be challenged
d. can be any market in the U.S., but the impact on foreign markets is not to be considered
e. must simultaneously demonstrate harm on a product market
117. In U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline company, the
Supreme Court would not allow the merger because:
a. the concentration ratio in the relevant product market was too high
b. the concentration ratio in the relevant geographic market was too high
c. a vital utility like natural gas should not be monopolized
d. the firms were potential competitors
e. none of the other choices
118. The case of U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline
company, is an example of a case where a merger was blocked due to:
a. real competition
b. geographic competition
c. potential competition
d. unfair competition
e. none of the other choices are correct
119. In FTC v. Proctor & Gamble, the Supreme Court blocked the merger of Clorox and Proctor & Gamble, even
though the companies did not make the same products. The court based its decision on which legal theory?
a. market share liability
b. application of the per se rule
c. potential competition
d. strict liability
e. negligence of the companies
120. In FTC v. Proctor & Gamble, the Supreme Court blocked the merger of Clorox and Proctor & Gamble, even
though the companies did not make the same products. The court based its decision on which legal theory?
a. market share liability
b. application of the per se rule
c. market predation
d. strict liability
e. none of the other choices
121. The case of FTC v. Proctor & Gamble, where the Supreme Court blocked the merger of Clorox and Proctor &
Gamble, even though the companies did not make the same products, is an example of the courts preventing a
merger due to:
a. real competition
b. geographic competition
c. potential competition
d. unfair competition
e. none of the other choices are correct
122. Under the merger guidelines a major reason to approve a merger is:
a. the demonstration that the merger will increase profits
b. the demonstration that the merger will reduce profits
c. the demonstration that the merger will create jobs
d. the demonstration that the merger will enhance efficiency in the market
e. the demonstration that the merger will reduce market share
123. Under the merger guidelines a major reason to approve a merger is:
a. the demonstration that the merger will increase profits
b. the demonstration that the merger will reduce profits
c. the demonstration that the merger will create jobs
d. the demonstration that the merger will reduce market share
e. none of the other choices are correct
124. If one of the firms involved in a potential merger is facing bankruptcy the Supreme Court will:
a. most likely oppose the merger
b. charge a lot of fees
c. require evidence that the firm will not actually go bankrupt before allowing the merger
d. look more favorably upon the merger
e. none of the other choices are correct
125. When a merger between two competitor firms is challenged, a strong defense would be that the merger will:
a. enhance international competition
b. protect a firm from bankruptcy
c. not lead to domination of the national geographic market
d. not lead to domination of the national product market
e. all of the other choices
126. To use the failing firm defense, the merging firms must establish which of the following:
a. the firm being acquired is not likely to survive without the merger
b. either the firm has no other prospective buyers or, if there are other buyers, the acquiring firm will affect
competition the least
c. other alternatives for saving the firm have been tried but have not succeeded
d. all of the other specific choices are correct
e. none of the other specific choices are correct
127. When a merger increases concentration, a defense that shows that the firms' customers are sophisticated, large
buyers that will not be taken advantage of by a bigger merged firm is:
a. the failing firm defense
b. potential competitor defense
c. power-buyer defense
d. directorate defense
e. no such defense is recognized
128. One successful defense that some firms have recently used to argue that a merger should be allowed because the
customers are large and sophisticated is called:
a. the monopoly-buyer defense
b. the power-buyer defense
c. the aggregate-firm defense
d. the foreign-competition defense
e. the infant-industry defense
129. One successful defense that some firms have recently used to argue that a merger should be allowed is called:
a. the monopoly-buyer defense
b. the infant-industry defense
c. the aggregate-firm defense
d. the foreign-competition defense
e. none of the other choices
130. The power-buyer defense to opposition to a merger can be used when:
a. the firm's customers are sophisticated and powerful buyers
b. the firm's customers are widely dispersed
c. the firm's customers are highly concentrated
d. the firm only has one customer
e. the firm's customers are in a diverse range of industries
131. In the case of U.S. v. Baker Hughes, concerning a merger of hardrock hydraulic underground drilling rig makers,
the court held that the proposed merger:
a. should not be stopped because sophisticated buyers would ensure competitive prices
b. should be stopped because the sellers would have over 75% of the market
c. should be stopped because buyers had insufficient power to insure competitive prices
d. should be stopped because the market was saturated with such firms
e. none of the other choices
132. In the case of U.S. v. Baker Hughes, concerning a merger of hardrock hydraulic underground drilling rig makers,
the court held that the proposed merger:
a. should not be stopped because survival of the industry was important to national security
b. should be stopped because the sellers would have over 75% of the market
c. should be stopped because buyers had insufficient power to insure competitive prices
d. should be stopped because the market was saturated with such firms
e. none of the other choices
133. The case of U.S. v. Baker Hughes, concerning a merger of hardrock hydraulic underground drilling rig makers, is
an example of a merger that was allowed due to:
a. the power-buyer defense
b. the power-seller defense
c. the power-market defense
d. the failing firm defense
e. the dispersion of power defense
134. A criticism of the European Union antitrust law is that:
a. it is too lenient
b. it is too focused on small European companies
c. it is used strategically against foreign firms
d. it favors the United States
e. it discriminates against big European companies that want to merge with US companies
135. When firms at the same level of operation, such as auto parts dealers, get together for some illegal purpose, it is
called:
a. a horizontal restraint of trade
b. a vertical restraint of trade
c. a de facto merger
d. a concentrated industry
e. none of the other choices
136. When firms at the same level of operation, such as several auto parts dealers, get together for some illegal purpose,
it is called:
a. a group boycott
b. a vertical restraint of trade
c. a de facto merger
d. a concentrated industry
e. none of the other choices
137. A horizontal restraint of trade is likely to occur when:
a. businesses at the same level of operation join together
b. businesses refuse to follow the per se rule
c. businesses integrate all levels of operations
d. factory production is curtailed and business rely on inputs from other, similar, producers
e. all of the other choices
138. A
market.
occurs when the businesses involved operate at the same level of the market and generally in the same
a. vertical restraint of trade
b. cartel
c. horizontal restraint of trade
d. monopoly
e. vertical merger
139. A
market.
occurs when the businesses involved operate at the same level of the market and generally in the same
a. vertical restraint of trade
b. cartel
c. vertical merger
d. monopoly
e. none of the other choices are correct
140. When rival firms agree to control output and raise prices, there is:
a. a horizontal merger
b. a cartel
c. a tying arrangement
d. an interlocking directorate
e. a vertical merger
141. When rival firms agree to control output and raise prices, there is:
a. a strategic market merger
b. a vertical merger
c. a tying arrangement
d. an interlocking directorate
e. none of the other choices
142. A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by
restricting output and raising prices is a:
a. vertical merger
b. boycott
c. cartel
d. confederation
e. directorate
143. A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by
restricting output and raising prices is called in antitrust a:
a. vertical merger
b. boycott
c. directorate
d. confederation
e. none of the other choices
144. The most famous cartel around today is:
a. Standard Oil
b. the Organization of Petroleum Exporting Countries
c. Wal-Mart
d. Staples and Office Max
e. BP and Shell
145. In general, is held to be the worst violation of antitrust laws.
a. price fixing
b. horizontal mergers
c. selling at a loss
d. vertical mergers
e. conspiracy
146. An agreement among businesses at the same level of industry to fix prices is:
a. legal if the parties mutually agree (no duress) to lower their prices
b. legal if the price set is reasonable to consumers
c. usually illegal per se under the antitrust laws
d. illegal unless the primary customers of the firms agree with the move
e. legal if the FTC participated in the decision
147. Illegal horizontal price fixing:
a. occurs when a manufacturer requires the retailers to sell its products at specific prices
b. occurs when a firm at one level of business controls the price of a firm's product at another level
c. ties the sale of one product at a particular price to the sale of another product
d. occurs when competitors agree to act together to set prices for their products
e. none of the other choices
148. Illegal horizontal price fixing:
a. occurs when a manufacturer requires the retailers to sell its products at specific prices
b. occurs when a firm at one level of business controls the price of a firm's product at another level
c. ties the sale of one product at a particular price to the sale of another product
d. occurs when a seller strictly limits distribution and price of its product
e. none of the other choices
149. In U.S. v. Trenton Potteries Co., competitors openly fixed prices and restrained sales. The Supreme Court held
that:
a. Section 2 of the Clayton Act was unconstitutional
b. price fixing is per se illegal
c. cartels that serve to lower consumer prices may be legal
d. as a potters association they were exempt from the antitrust laws
e. horizontal groupings that do not involve mergers are not illegal
150. In U.S. v. Trenton Potteries Co., competitors openly fixed prices and restrained sales. The Supreme Court held
that:
a. Section 2 of the Clayton Act was unconstitutional
b. horizontal groupings that do not involve mergers are not illegal
c. cartels that serve to lower consumer prices may be legal
d. trade associations that openly announce fixed prices do not violate the law
e. none of the other choices
151. In Freeman v. San Diego Assn. of Realtors, most of the real estate Multiple Listing Services joined together to
provide their service to real estate agents. The association charged all realtors the same price. When challenged as
price fixing, the appeals court held that this:
a. was per se illegal price fixing
b. was illegal price fixing under a rule of reason analysis
c. did not violate the antitrust laws because the quality of service rose and the price fell
d. did not violate the antitrust laws because most consumers of the service preferred the new arrangement, so
there was a net improvement
e. none of the other choices
152. In Freeman v. San Diego Assn. of Realtors, most of the real estate Multiple Listing Services joined together to
provide their service to real estate agents. The association charged all realtors the same price. When challenged as
price fixing, the appeals court held that this:
a. was illegal price fixing under a rule of reason analysis
b. did not violate the antitrust laws because the control was on maximum prices, not minimum prices
c. did not violate the antitrust laws because the quality of service rose and the price fell
d. did not violate the antitrust laws because most consumers of the service preferred the new arrangement, so
there was a net improvement
e. none of the other choices
153. In Freeman v. San Diego Assn. of Realtors, most of the real estate Multiple Listing Services joined together to
provide their service to real estate agents. The association charged all realtors the same price. When challenged as
price fixing, the appeals court held that:
a. the association was not engaged in illegal price fixing because it was not charging more for the same
services than the most efficient association
b. the association was not engaged in illegal price fixing because it made the industry more efficient
c. the association was engaged in illegal price fixing because it was charging far more for the same services
than the most efficient association
d. the association was engaged in illegal price fixing, but it was improving the industry's efficiency so it could be
overlooked
e. the association itself was illegal
154. In Freeman v. San Diego Assn. of Realtors, most of the real estate Multiple Listing Services joined together to
provide their service to real estate agents. The association charged all realtors the same price. When challenged as
price fixing, the appeals court held that:
a. the association was not engaged in illegal price fixing because it was not charging more for the same
services than the most efficient association
b. the association was not engaged in illegal price fixing because it made the industry more efficient
c. the association itself was illegal
d. the association was engaged in illegal price fixing, but it was improving the industry's efficiency so it could be
overlooked
e. none of the other choices are correct
155. Most copyrighted music is licensed for use by BMI and ASCAP (organizations that represent musicians,
composers, and publishers of music). They charge set fees to music users through "blanket licensing," which does
not allow music users to bargain over price. This was attacked as price fixing. The Supreme Court held the
practice:
a. legal using a rule of reason analysis because otherwise the market could not function well
b. legal because it involved copyrighted material not subject to the antitrust laws
c. illegal under a rule of reason analysis, ruling that prices must be negotiated or that there must be many more
price categories than before
d. illegal under the per se rule against price fixing
e. none of the other choices
156. Most copyrighted music is licensed for use by BMI and ASCAP (organizations that represent musicians,
composers, and publishers of music). They charge set fees to music users through "blanket licensing," which does
not allow music users to bargain over price. This was attacked as price fixing. The Supreme Court held the
practice:
a. legal because the prices were "just and reasonable"
b. legal because it involved copyrighted material not subject to the antitrust laws
c. illegal under a rule of reason analysis, ruling that prices must be negotiated or that there must be many more
price categories than before
d. illegal under the per se rule against price fixing
e. none of the other choices
157. In U.S. v. United States Gypsum, regarding sharing of price information by gypsum makers, the Supreme Court
held that:
a. a rule of reason applied to the case, which the arrangement failed
b. the case was subject to a per se rule against price fixing, so it was illegal
c. the gypsum industry is exempt from antitrust laws
d. the gypsum industry is so small information sharing is essential
e. the gypsum industry is so small that it simply could not conspire to restrain information
158. In U.S. v. United States Gypsum, regarding sharing of price information by gypsum makers, the Supreme Court
held that:
a. the gypsum industry is so small that it simply could not conspire to restrain information
b. the case was subject to a per se rule against price fixing, so it was illegal
c. the gypsum industry, being part of construction, is exempt from antitrust laws
d. the gypsum industry is so small information sharing is essential
e. none of the other choices
159. In Todd v. Exxon Corp., where Exxon other oil companies hired a consultant to gather information about the
salaries they paid professionals at the companies, and the information was used to help set salaries, the appeals
court held the practice was:
a. illegal because there is a per se rule against sharing price information among competitors
b. illegal if the sharing of information produced anticompetitive effects in salaries
c. legal because the information was shared openly, so there could be no conspiracy
d. legal because an outsider collected the information, not the firms themselves
e. none of the other choices
160. In Todd v. Exxon Corp., where Exxon other oil companies hired a consultant to gather information about the
salaries they paid professionals at the companies, and the information was used to help set salaries, the appeals
court held the practice was:
a. illegal because there is a per se rule against sharing price information among competitors
b. legal because improved price information helps produce better decisions in the market
c. legal because the information was shared openly, so there could be no conspiracy
d. legal because an outsider collected the information, not the firms themselves
e. none of the other choices
161. In Todd v. Exxon Corp., where Exxon other oil companies hired a consultant to gather information about the
salaries they paid professionals at the companies, and the information was used to help set salaries, the appeals
court noted that:
a. if the companies shared the data equally among themselves, there was nothing illegal about the data
exchange
b. if the companies made the data in a data exchange public, they could face criminal charges
c. if the companies refused to make the data in a data exchange public, they could face criminal charges
d. a court is more likely to approve a data exchange when the information is made public
e. a court is less likely to approve a data exchange when the information is made public
162. In Todd v. Exxon Corp., where Exxon other oil companies hired a consultant to gather information about the
salaries they paid professionals at the companies, and the information was used to help set salaries, the appeals
court noted that:
a. if the companies shared the data equally among themselves, there was nothing illegal about the data
exchange
b. if the companies made the data in a data exchange public, they could face criminal charges
c. if the companies refused to make the data in a data exchange public, they could face criminal charges
d. a court is less likely to approve a data exchange when the information is made public
e. none of the other choices are correct
