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True / False
1. One of the reasons for passing the Sherman Act was to respond to the political unpopularity of big business.
a. True
b. False
2. The Sherman Act was passed in response to the general unpopularity of government agencies.
a. True
b. False
3. The Sherman Act states that all contracts in restraint of trade are illegal.
a. True
b. False
a. True
b. False
4. The Sherman Act applies to trusts, not to corporations and other business forms.
a. True
b. False
5. An attempt to monopolize trade, even if unsuccessful, may be a violation of the Sherman Act.
a. True
b. False
6. The Sherman Antitrust Act attacks the practice of exclusive dealing contracts.
a. True
b. False
7. Tying sales are prohibited by the Clayton Act.
a. True
b. False
8. Certain "exclusive deals" are prohibited by the Clayton Act.
a. True
b. False
9. When competitor firms agree to fix prices, the agreement is most likely a violation of the Clayton Act.
a. True
b. False
10. Mergers of competitors that would injure competition are attacked under the Clayton Act.
a. True
b. False
11. The FTC Act restricted the enforcement of certain sections of the Sherman Act.
12. Unfair methods of competition are illegal under the FTC Act.
a. True
b. False
13. Although many industries have lobbied Congress to be made exempt from the antitrust laws, none have been
exempted.
a. True
b. False
14. State governments may restrict competition in industries such as cable television and not violate antitrust laws.
a. True
b. False
15. The Parker doctrine allows state governments to restrict competition in industries, such as cable television, and not
violate antitrust laws.
a. True
b. False
16. Most labor union activities to work to fix wages are exempt from the antitrust laws.
a. True
b. False
17. The insurance industry is exempt from antitrust law so long as the states regulate it.
a. True
b. False
18. The banking industry is exempt from antitrust law so long as the states regulate it.
a. True
b. False
19. Lobbying members of the legislature to seek special favors for a competitor does not violate the antitrust laws.
a. True
b. False
20. The Noerr-Pennington doctrine holds that lobbying members of the legislature to seek special favors for a
competitor does not violate the antitrust laws.
a. True
b. False
21. Some activities of nonprofit groups and agricultural cooperatives are exempt from the antitrust laws.
a. True
b. False
22. The Parker doctrine holds that lobbying members of the legislature to seek special favors for a competitor does not
violate the antitrust laws.
a. True
b. False
23. Violations of the Clayton Act are the responsibility of the Justice Department and the Federal Trade Commission.
a. True
b. False
24. All antitrust suits are brought by the federal government.
a. True
b. False
25. Antitrust suits may be brought by the federal government or by private parties.
a. True
b. False
26. Violators of the Sherman Act face the possibility of being sent to prison for violating that law.
a. True
b. False
27. Violators of the Sherman Act face fines as high as $100 million per violation.
a. True
b. False
28. A private party who sues another party for violating the Sherman Act, and who wins, gets three times the actual
damages plus court costs and attorneys' fees.
a. True
b. False
29. A firm that violates the antitrust laws could be required to break up and thereby set up another firm to compete
with it.
a. True
b. False
30. A firm that violates the antitrust laws could be required to break up into several independent companies.
a. True
b. False
31. Treble damages may only be collected by direct purchasers of goods in state antitrust suits.
a. True
b. False
32. Government agencies may sue for a court order to block a merger of two firms.
a. True
b. False
33. A per se rule in antitrust means the practice is exempt from prosecution.
a. True
b. False
34. A per se rule in antitrust means the practice in question is automatically held to be illegal by the courts.
a. True
b. False
35. 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.
a. True
b. False
36. The Supreme Court has rarely used the rule of reason analysis in antitrust cases.
a. True
b. False
37. The Sherman and Clayton Act provide strict guidelines for what illegal monopolization is.
a. True
b. False
38. Because the antitrust statutes are unclear about exactly what is illegal monopolization, it is up to the courts to decide
the primary factors.
a. True
b. False
39. In Spanish Broadcasting v. Clear Channel Comm., where a radio station company sued the largest firm in the
industry for monopolization, the court found that the large company illegally exploited its position to suppress
competition.
a. True
b. False
40. In Spanish Broadcasting v. Clear Channel Comm., where a radio station company sued the largest firm in the
industry for monopolization, the court found no evidence of illegal monopolistic activity by the large firm.
a. True
b. False
41. In Spanish Broadcasting v. Clear Channel Comm., where a radio station company sued the largest firm in the
industry for monopolization, the court found that the large company, by becoming part owner of a Spanish-language
chain of stations, extended its market power illegally.
a. True
b. False
42. A horizontal merger is when two competitor firms come together to form a new firm.
a. True
b. False
43. A vertical merger is when two competitor firms come together to form a new firm.
a. True
b. False
44. The rule of reason approach to mergers was established in the landmark case Standard Oil Company v. U.S.
a. True
b. False
45. In Standard Oil v. U.S., the Supreme Court determined that the combination of companies in the Standard Oil
Trust reflected an efficient arrangement that benefitted consumers and found no Sherman Act violations.
a. True
b. False
46. The Standard Oil Trust was found in violation of Section 1 of the Sherman Antitrust Act. That meant under a rule
of reason, the Trust was guilty of monopolizing trade.
a. True
b. False
47. The Standard Oil Trust was found liable of a per se violation of Section 1 of the Sherman Antitrust Act for
monopolizing trade.
a. True
b. False
48. Before two firms of significant size merge, they are required to notify the government at least a month in advance.
a. True
b. False
49. Under the Hart-Scott-Rodino Antitrust Improvement Act, the government may not block proposed mergers of
firms; the mergers must be contested in court later.
a. True
b. False
50. Under the Hart-Scott-Rodino Antitrust Improvement Act, the FTC or the Justice Department may block a planned
merger until the firms agree to certain conditions.
a. True
b. False
51. The Justice Department's merger guidelines place particular importance on the notion of market power.
a. True
b. False
52. The Justice Department's merger guidelines states that the ability to maintain prices above the competitive level is
evidence of market power.
a. True
b. False
53. The Department of the Commerce has published a series of merger guidelines that discuss factors considered in
determining whether a merger is likely to be challenged.
a. True
b. False
54. A company's market share refers to the percent of a relevant market controlled by the company.
a. True
b. False
55. When one firm has more than 25 percent of the share of a market, it is in violation of the merger guidelines if it
attempts to merge with another firm.
a. True
b. False
56. In an antitrust case, the geographic market affected by a merger must be regional or national, not local, for the law
to apply.
a. True
b. False
57. When evaluating the relevant market in an antitrust case, both the product market and the geographic market may
be considered.
a. True
b. False
58. In some cases, courts might prevent a merger to keep potential, not current, competition alive in an industry.
a. True
b. False
59. In U.S. v. El Paso Natural Gas, two gas pipeline companies in physically distinct markets, and not in competition,
were not allowed to merge because it was possible that in the future they could compete with one another.
a. True
b. False
60. In FTC v. Procter and Gamble, the Supreme Court held that Procter and Gamble could not merge with Clorox
because Procter and Gamble had too much of a share of the bleach market already.
a. True
b. False
61. In FTC v. Procter and Gamble, the Supreme Court held that Procter and Gamble could not merge with Clorox
because even though the firms did not compete currently, they could compete in the future.
a. True
b. False
62. The Supreme Court has held that if two firms are potential competitors then there is a per se rule against a merger.
a. True
b. False
63. Under the failing firm defense, a strong firm in an industry will be allowed to merge with another firm in the same
industry if that firm was about to go bankrupt.
a. True
b. False
64. When a company uses the failing firm defense, it must show that alternatives have been tried and have not
succeeded in saving the firm.
a. True
b. False
