163. In FTC v. Indiana Federation of Dentists, a dentists’ organization required its members to withhold x–rays from
insurance companies. The Supreme Court held this rule:
a. justified for medical privacy, and so legal
b. legal for a profession such as dentistry, which is regulated by the state, to withhold x-rays
c. illegal based on a rule of reason analysis
d. illegal based on a per se analysis
e. legal, only because the FTC cannot sue dentists or other medical professionals
164. In FTC v. Indiana Federation of Dentists, a dentists’ organization required its members to withhold x–rays from
insurance companies. The Supreme Court held this rule:
a. justified for medical privacy, and so legal
b. legal for a profession such as dentistry, which is regulated by the state, to withhold x-rays
c. illegal based on a rule of reason analysis
d. legal, because the FTC cannot sue medical professionals
e. none of the other choices
165. The Indiana Federation of Dentists required its members not to provide insurance companies with patient x-rays.
The FTC sued the Federation, claiming that it violated the antitrust laws. The Supreme Court held that dentists:
a. were free to decide whether to give records to the insurance companies or not
b. did not have to give their records to the insurance companies, and the FTC could not sue
c. could not ban together to conspire in restraint of trade against the insurance companies
d. had an ethical duty to protect patients‘ records, so the Federation‘s position was upheld
e. none of the other choices
166. When firms competing at the same level of business agree to allocate territories in a market, and fix prices at the
same time, the following may result:
a. firms may exercise monopoly power in their assigned region
b. competition within regions will be reduced
c. their actions may be found per se illegal
d. the Sherman Act may be violated
e. all of the other choices
167. A(n) occurs when firms competing at the same level of business reach an agreement to divide the market on
geographic or other terms.
a. vertical market division
b. horizontal restraint of trade
c. sideways market division
d. real market division
e. antitrust market division
168. A(n) occurs when firms competing at the same level of business reach an agreement to divide the market on
geographic or other terms.
a. vertical market division
b. antitrust market division
c. sideways market division
d. real market division
e. none of the other choices are correct
169. Agreements that provide horizontal are often held to violate antitrust law.
a. customer allocations
b. customer preference
c. customer bargaining
d. customer trading
e. none of the other choices are correct
170. Horizontal market division is often held to violate antitrust law because it:
a. eliminates competition among firms competing in a national market
b. increases efficiency, but raises prices
c. leads to price fixing
d. gives consumers more choice
e. decreases exports
171. Horizontal market division is often held to violate antitrust law because it:
a. decreases exports
b. increases efficiency, but raises prices
c. leads to price fixing
d. gives consumers more choice
e. none of the other choices are correct
172. Horizontal market division allows competing firms to:
a. be more efficient
b. exercise monopoly power within a region
c. hire fewer workers
d. give better worker benefits
e. diversify into more markets
173. Horizontal market division allows competing firms to:
a. be more efficient
b. diversify into more markets
c. hire fewer workers
d. give better worker benefits
e. none of the other choices are correct
174. Which of the following actions at an industry convention could be a violation of antitrust law:
a. discussing with other members the prices of your own product and of competitors’ products
b. stating reservations concerning remarks or discussions
c. limiting discussion to non-business topics
d. consulting corporate counsels about the propriety of a topic of discussion
e. all of the other specific choices are correct
175. To avoid violating antitrust law while attending industry conventions, competitors should NOT:
a. discuss with other members prices or anything that might affect prices
b. make public announcements or statements about your own prices
c. make public announcements or statements about competitors’ prices
d. talk about company plans for particular geographic product markets
e. all of the other specific choices are correct
176. To avoid violating antitrust law while attending industry conventions, competitors should:
a. discuss with other members prices or anything that might affect prices
b. make public announcements or statements about your own prices
c. talk about company plans for particular geographic product markets
d. all of the other specific choices are correct
e. none of the other specific choices are correct
177. Vertical business relationships:
a. concern up-turns and down-turns in industry sales that impact investments
b. primarily concern retailer pricing practices
c. concern relations among firms at different levels, such as manufactures and wholesalers
d. are per se illegal
e. concern dealings among firms at the same level of business
178. Vertical business relationships:
a. concern up-turns and down-turns in industry sales that impact investments
b. primarily concern retailer pricing practices
c. concern relations among firms at the same level of business
d. are per se illegal
e. none of the other choices
179. Vertical restraints of trade are arrangements between:
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 sellers
180. Vertical restraints of trade are arrangements between:
a. manufacturers at the same level of production
b. manufactures in the same geographical area
c. distributors of the same size
d. small-sized sellers and large-sized sellers
e. none of the other choices
181. Trade arrangements governing the relationships in the different states of production, distribution and sale of the
same product are:
a. horizontal business arrangements
b. vertical business arrangements
c. real business arrangements
d. single product business arrangements
e. sideways business arrangements
182. Trade arrangements governing the relationships in the different states of production, distribution and sale of the
same product are:
a. horizontal business arrangements
b. sideways business arrangements
c. real business arrangements
d. single product business arrangements
e. none of the other choices are correct
183. Vertical price fixing:
a. involves an agreement among all manufacturers of a product
b. involves an agreement among manufacturers, wholesalers, and retailers
c. attempts to control the price at which a product is sold to consumers
d. involves an agreement among all manufacturers of a product and attempts to control the price at which a
product is sold to consumers
e. involves an agreement among manufacturers, wholesalers, and retailers and attempts to control the price at
which a product is sold to consumers
184. A retailer is told by the manufacturer the minimum price at which a product can be sold. In antitrust this is an
example of:
a. a tying arrangement
b. resale price maintenance
c. exclusive dealing
d. a consignment arrangement
e. none of the other choices
185. A retailer is told by the manufacturer the minimum price at which a product can be sold. In antitrust this is an
example of:
a. a tying arrangement
b. a boycott
c. exclusive dealing
d. market share liability
e. none of the other choices
186. In general, vertical price-fixing arrangements are intended to:
a. increase efficiency
b. reduce efficiency
c. divide a market into geographical regions
d. control the price at which a product is sold to consumers
e. increase competition
187. In general, vertical price-fixing arrangements are intended to:
a. increase efficiency
b. reduce efficiency
c. divide a market into geographical regions
d. increase competition
e. none of the other choices are correct
188. is an agreement between a manufacturer, a supplier, and retailers of a product under which the retailers
agree to sell the product at not less than a minimum price.
a. Resale price maintenance
b. Resale price fixing
c. Resale price enhancement
d. Price fixing
e. Minimum resale price agreement
189. is an agreement between a manufacturer, a supplier, and retailers of a product under which the retailers
agree to sell the product at not less than a minimum price.
a. Minimum resale price agreement
b. Resale price fixing
c. Resale price enhancement
d. Price fixing
e. none of the other choices are correct
190. In Dr. Miles Medical Co. v. John D. Park & Sons, the Supreme Court said that when a producer sells to
wholesalers and retailers, and requires them to resell the products at prices set by the producer, under the Sherman
Act it was an:
a. illegal restraint of trade
b. illegal under a rule of reason analysis because competition was injured
c. legal under a rule of reason analysis because the medicines were patented
d. legal under a rule of reason analysis because the policy kept prices lower for consumers
e. none of the other choices
191. In 1911, with regard to resale price maintenance, the Supreme Court pronounced a basic rule that:
a. retailers must agree to a producer or supplier’s terms
b. once a producer or supplier sells a product to a retailer, it cannot control the price the retailer will charge
consumers
c. a producer has complete control over the price a retailer will charge to consumers
d. a producer can control the price of some goods, like luxury items, but not others, like food, after selling them
to a retailer
e. none of the other choices are correct
192. In 1911, with regard to resale price maintenance, the Supreme Court pronounced a basic rule that:
a. retailers must agree to a producer or supplier’s terms
b. once a producer or supplier sells a product to a retailer, it can control the price the retailer will charge
consumers if it has approval from the FTC
c. a producer has complete control over the price a retailer will charge to consumers
d. a producer can control the price of some goods, like luxury items, but not others, like food, after selling them
to a retailer
e. none of the other choices are correct
193. Producers of quality brand-name products often favor resale price maintenance because it:
a. allows retailers to earn higher profits
b. encourages retailers to advertise more
c. encourages retailers to give customers better service
d. promotes retail competition based on service
e. all of the other choices
194. Among the groups that have traditionally favored resale price maintenance arrangements are:
a. mass retailers
b. producers of well-known products
c. small retailers
d. producers of well-known products and small retailers
e. mass retailers and producers of well-known products
195. Resale price maintenance is usually favored by:
a. mass retailers
b. producers of well-known products
c. small retailers
d. both b and c
e. choices a, b, and c are all correct
196. Mass retailers oppose resale price maintenance because it hinders their strategy of:
a. selling a few high quality products
b. selling name brand goods at high prices
c. selling large volumes of goods at low prices
d. selling large volumes of goods at high prices
e. selling cheap knockoffs
197. Mass retailers oppose resale price maintenance because it hinders their strategy of:
a. selling a few high quality products
b. selling name brand goods at high prices
c. selling cheap knockoffs
d. selling large volumes of goods at high prices
e. none of the other choices are correct
198. Andrea has a small shop that sells high quality purses and is located next to the mass retailer Purses-R-Us. Andrea
is likely:
a. a supporter of resale price maintenance
b. an opponent of resale price maintenance
c. indifferent to resale price maintenance
d. unaffected by resale price maintenance since purses do not come from distributors
e. none of the other choices are correct
199. In State Oil Co. v. Khan, a gasoline distributor controlled the maximum gas sales markup that its gas station
dealers could charge (maximum price fixing). The Supreme Court held that:
a. all vertical price fixing subject to a rule of reason
b. vertical price fixing of maximum retail prices was illegal
c. when vertical price fixing lowers prices, it may be justified by rule of reason
d. vertical price fixing may cause dealers to be able to furnish more services in an anticompetitive manner
e. vertical price fixing may hurt the ability of sellers to compete
200. In State Oil Co. v. Khan, a gasoline distributor controlled the maximum gas sales markup that its gas station
dealers could charge (maximum price fixing). The Supreme Court held that:
a. all vertical price fixing subject to a rule of reason
b. vertical price fixing of maximum retail prices was illegal
c. vertical price fixing may injure the ability of sellers to compete so is generally illegal
d. vertical price fixing may cause dealers to be able to furnish more services in an anticompetitive manner
e. none of the other choices
201. As illustrated in State Oil Co. v. Khan, where a gasoline distributor controlled the maximum gas sales markup that
its gas station dealers could charge (maximum price fixing), the Supreme Court has held that:
a. vertical price fixing is always legal
b. vertical price fixing is never legal
c. vertical price fixing is acceptable under the rule of reason if it benefits consumers
d. vertical price fixing is acceptable under the rule of reason if it benefits industry
e. vertical price fixing is acceptable per se if it benefits the industry
202. As illustrated in State Oil Co. v. Khan, where a gasoline distributor controlled the maximum gas sales markup that
its gas station dealers could charge (maximum price fixing), the Supreme Court has held that:
a. vertical price fixing is always legal
b. vertical price fixing is never legal
c. vertical price fixing is acceptable per se if it benefits the industry
d. vertical price fixing is acceptable under the rule of reason if it benefits industry
e. none of the other choices are correct
203. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court held that:
a. all vertical price fixing subject to a rule of reason
b. vertical price fixing of maximum retail prices was illegal
c. vertical price fixing may injure the ability of sellers to compete so is generally illegal
d. vertical price fixing may cause dealers to be able to furnish more services in an anticompetitive manner
e. none of the other choices
204. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court used the case to overturn the rule
established a century before in:
a. State Oil Co. v. Khan
b. Business Electronics v. Sharp Electronics
c. Dr. Miles Medical Co. v. John D. Park & Sons
d. Standard Oil v. U.S.
e. none of the other choices
205. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court held that:
a. all vertical price fixing subject to a per se rule of illegality
b. vertical price restraints would be viewed under a rule of reason
c. vertical price restraints injure the ability of sellers to compete so are generally illegal
d. vertical price fixing of minimum prices is subject to a per se rule of illegality
e. none of the other choices
206. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court held that:
a. all vertical price fixing subject to a per se rule of illegality
b. resale price maintenance that injures intrabrand competition would be generally illegal
c. vertical price restraints injure the ability of sellers to compete so are generally illegal
d. vertical price fixing of minimum prices is subject to a per se rule of illegality
e. none of the other choices
207. The general understanding of Leegin Creative Leather Products v. PSKS, where a maker of leather goods would
not sell to stores that would not follow its pricing policy (resale price maintenance), is that:
a. resale price maintenance continues to be per se illegal
b. strong territorial controls are generally illegal
c. manufacturers have wide control in selecting dealers to distribute their products
d. manufacturers must have a strong justification for not selling to distributors who request their products
e. none of the other choices
208. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court held that:
a. resale price maintenance is always illegal as stated in Dr. Miles Medical Co. v. John D. Park & Sons
b. resale price maintenance can help promote intrabrand competition, which is the primary purpose of the
antitrust laws
c. vertical price fixing can help promote intrabrand competition, which is the primary purpose of the antitrust
laws
d. resale price maintenance can help promote interbrand competition, which is the primary purpose of the
antitrust laws
e. horizontal price fixing can help promote interbrand competition, which is the primary purpose of the antitrust
laws
209. In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not
follow its pricing policy (resale price maintenance). The Supreme Court held that:
a. resale price maintenance is always illegal as stated in Dr. Miles Medical Co. v. John D. Park & Sons
b. resale price maintenance can help promote intrabrand competition, which is the primary purpose of the
antitrust laws
c. vertical price fixing can help promote intrabrand competition, which is the primary purpose of the antitrust
laws
d. horizontal price fixing can help promote interbrand competition, which is the primary purpose of the antitrust
laws
e. none of the other choices are correct
210. Based on court rulings, one would expect that retail dealers and manufacturers may discuss ways in which their
respective profitability will be enhanced so long as:
a. they agree to fix prices in a vertical arrangement
b. they agree to fix prices in a horizontal arrangement
c. they agree to fix prices in a territorial arrangement
d. their activities help interbrand competition
e. none of the other choices
211. Retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long
as:
a. they agree to fix prices in a vertical arrangement
b. they agree to fix prices in a horizontal arrangement
c. they agree to fix prices in a territorial arrangement
d. all of the other choices
e. none of the other choices
212. An example of a vertical arrangement that manufacturers impose on their retailers is:
a. a territorial restriction
b. a service restraint
c. a customer restriction
d. a territorial restriction or a customer restriction
e. none of the other choices, since all are per se illegal
213. Coca-Cola’s limitation on where a bottler is permitted to sell and deliver the product is an example of:
a. price fixing
b. a territorial restriction
c. a horizontal business restriction
d. a customer restriction
e. a service restraint
214. Coca-Cola’s limitation on where a bottler is permitted to sell and deliver the product is an example of:
a. price fixing
b. a service restraint
c. a horizontal business restriction
d. a customer restriction
e. none of the other choices are correct
215. Vertical nonprice restraints, such as territorial restraints imposed by producers on retailers, have, in recent years,
been viewed by the Supreme Court:
a. as per se illegal
b. as per se illegal if tied to a customer restriction, otherwise a rule of reason analysis is applied
c. under a rule of reason usually sympathetic to the producer
d. under a rule of reason usually sympathetic to the retailer
e. as per se legal