48. Which of the following remedies are available under the Sherman Act?
a. Injunctive
b. Damages of four times the amount of actual loss sustained
c. Consequential damages
d. All of these
49. Under Section 1 of the Sherman Act, which of the following is illegal per se?
a. Vertical market allocations
b. Horizontal market allocations
c. Vertical territorial and customer restrictions
d. All of these.
50. If all milk producers in the area agree to set a minimum price for raw milk, this would be an example of:
a. horizontal allocation.
b. vertical market restraint.
c. horizontal price fixing.
d. a tying arrangement.
51. A manufacturer agrees to sell the distributor 1,000 boxes of 2-quart bowls only if he agrees to resell to the retailer at
cost plus $1.10 per bowl and the retailer must agree to sell at no less than his cost plus .50 per bowl. This is:
a. horizontal price fixing.
b. vertical price fixing.
c. vertical market allocation.
d. a group boycott.
52. Barb sets her prices to undercut her competitors by 20%. This is:
a. vertical price fixing.
b. market allocation in restraint of competition.
c. no violation of the Sherman Act.
d. per se illegal.
53. Three of the airline companies agree that they will not go any lower than $100 each way for coast-to–coast tickets.
This is:
a. vertical price maintenance.
b. horizontal group boycott.
c. vertical market allocation.
d. horizontal price fixing.
54. If X Co. agrees with S Co. that X will not sell beer in Wisconsin if S will not sell beer in Colorado, under the
Sherman Act, this is:
a. no violation.
b. a per se illegal horizontal price fixing agreement.
c. a per se illegal horizontal market allocation.
d. a per se illegal horizontal tying agreement.
55. Harry Jones at Jones Brothers Furniture Co. does not like the Bryte Lamp Co. representative, so he decided that
Jones Brothers would boycott Bryte. Under the Sherman Act, this is:
a. per se illegal.
b. no violation.
c. a tying arrangement.
d. vertical market allocation.
56. To determine “market share,” one would require knowledge of which of the following?
a. What other products compete with the product
b. Where the product is sold
c. How much of the product is sold
d. All of these
57. In order for there to be a violation of Section 2 of the Sherman Act, in addition to monopoly power, the courts must
find:
a. unfair conduct.
b. concerted action.
c. competitive behavior.
d. economic advantage.
58. If a seller of a product conditions its sale upon the buyer’s purchasing a second product from the seller, this is known
as a:
a. tying arrangement.
b. vertical boycott.
c. horizontal restraint.
d. disparagement.
59. If a type of restraint is characterized as per se illegal:
a. the plaintiff need only show that the type of restraint occurred.
b. the defendants may defend on the basis that the restraint was reasonable.
c. the court is required to conduct extensive economic analysis into the type of harm caused or the business
excuse for use of the restraint.
d. the plaintiff must prove that the restraint limited competition.
60. Margaret tells the members of the Raleigh Association of Restaurant Owners that they will be able to get a better
price on linen supplies (tablecloths, napkins) if they will deal with one supplier rather than split their business between
two. They all know Margaret deals with Niagara Linen rather than Cayuga. Under the Sherman Act, if they all sign
contracts with Niagara:
a. there is no violation since there is no express agreement to boycott Cayuga.
b. illegality may be inferred from this conduct.
c. there is no concerted action.
d. this is horizontal market allocation.
61. If Hyvac Vacuum Cleaners requires that Hyvac bags be used for the warranty to be valid, under the Sherman Act,
this is:
a. illegal per se.
b. a tying arrangement, which is always judged by rule of reason.
c. either illegal per se or judged by the rule of reason depending on the economic power of the seller and the
amount of interstate commerce in cleaner bags affected.
d. no violation.
62. Market share greater than what percentage generally indicates monopoly power?
a. 25%.
b. 30%.
c. 50%.
d. 75%.
63. Sareno Cheese Co. supplies mozzarella cheese to pizza restaurants at $1.50 per pound. In order to snare the
business from a pizzeria, Sareno offers to sell them cheese at $1.25 per pound. This will violate the Robinson-
Patman Act unless:
a. the pizzeria can already get the cheese for $1.15 elsewhere.
b. Sareno can show it is cost justified because of quantity.
c. Sareno lowers the price to all its customers.
d. Any of these.
64. The Sherman Act:
a. prohibits contracts and combinations in restraint of trade.
b. prohibits conspiracies in restraint of trade.
c. proscribes monopolization and any attempts to monopolize.
d. All of these.
65. A restraint involving collaboration among competitors at the same level in the chain of distribution is:
a. a vertical restraint.
b. a horizontal restraint.
c. price fixing.
d. a trust.
66. The 2010 guidelines regarding horizontal mergers:
a. use a single methodology for merger analysis.
b. are intended to identify harmful mergers while avoiding unnecessary interference with mergers that will not be
likely to affect competition.
c. explain that market definition is a necessary starting point of merger analysis.
d. reject use of the Herfindahl-Hirschman Index in quantifying market concentration.
67. The National Tax Accountants Professional Association (TAPA) has recommended that its members charge a
minimum of $25 per hour for completing tax forms. This recommendation is probably:
a. a per se price-fixing violation of the Sherman Act.
b. not a violation of the Sherman Act, because it has been made by a professional association.
c. not a violation of the Sherman Act, because a fee is different from a price.
d. subject to the rule of reason.
68. The 1992 Horizontal Merger Guidelines, as revised in 1997 and 2010:
a. were issued by the Justice Department to be additional to the FTC‘s separate guidelines.
b. require a mechanical application; in order to reduce the previously used analytical framework, which was far
too subjective and uncertain.
c. rejects use of the Herfindahl-Hirschman Index.
d. deals with mergers of powerful buyers and mergers between competing buyers.
69. For purposes of the concerted action requirement under Section 1 of the Sherman Act:
a. a corporation is viewed separately from its wholly owned subsidiaries.
b. a firm and its employees are viewed as one entity.
c. concerted action must be established by an express agreement.
d. All of these are correct.
70. Failure to comply with Sections 1 or 2 of the Sherman Act:
a. is a felony and can result in imprisonment.
b. may subject an individual to a fine of up to $1 million under the 2004 amendments.
c. may subject a corporation to a fine of $100 million per violation.
d. All of these.
71. The National Cooperative Research Act:
a. prohibits using the rule of reason test in judging joint ventures in research and development of new technology.
b. is designed to clear up uncertainty about the legality of joint ventures.
c. now requires treble damages if joint ventures are formed in violation of Section 1 of the Sherman Act.
d. All of these.
72. In tying arrangements, the courts may establish a seller’s economic power by showing that:
a. the seller occupied a dominant position in the tying market.
b. the seller’s product enjoys an advantage not shared by its competitors in the tying market.
c. a substantial number of customers have accepted the tying arrangement and the sole explanation for their
willingness to comply is the seller’s economic power in the tying market.
d. All of these.
73. The Clayton Act regulates all but which of the following?
a. Price discrimination
b. Tying contracts and mergers
c. Exclusive dealing by labor organizations
d. Interlocking directorates
74. Conglomerate mergers have been challenged only where:
a. one of the merging firms would be highly likely to enter the market of the other firm.
b. the merged company would be disproportionately large compared with the largest competitors in its industry.
c. Both of these.
d. None of these.
75. Major, Inc. has 68% of the market share in a particular geographic region for one of its products. Does Major have
a monopoly? Explain.
76. Widget Maker, Inc. manufactures and sells widgets. It sells widgets to Marklin of Marklin’s Department Store and
gives him a preference in pricing that discriminates against other retailers. Does Marklin have liability for price
discrimination? Does Widget Maker, Inc. have liability for price discrimination? Explain.
77. Discuss the validity and effect of each of the following:
a. Two manufacturers of the same product decide to allocate territories, with one taking the
southern States.
b. A labor union encourages its members and all consumers to boycott a product manufactured by
a company that refuses to honor a union contract.
Carrin‘s Department Store sells its products for 10% under the suggested retail price. One
c. manufacturer tells the store it will not supply wholesale goods to it unless it charges at least the
suggested retail price.
78. Elko Inc. and Fulda Inc. closely monitor each other’s actions regarding the sale of consumer electronic products.
Each corporation tries to match the other’s product designs and specifications, prices, and advertising strategies. As
a result, the two corporations have similar products, prices, and profits. Is this a violation of the antitrust laws?
79. Explain how price differentials may be justified so that the Robinson-Patman Act is not violated.
80. What are the major functions of the Federal Trade Commission (FTC)?