Chapter 18 – Antitrust Policy and Regulation
1. Laws and government actions designed to prevent monopoly and to promote competition
are the focus of:
2. Antitrust laws are essentially:
Chapter 18 – Antitrust Policy and Regulation
3. The basic purpose of antitrust laws is to:
4. Business combinations in the 1870s and 1880s that came to dominate industries, and which
assigned control to a single decision group are referred to as:
5. In a monopolistic market, the following results occur, except:
Chapter 18 – Antitrust Policy and Regulation
6. The cornerstone of antitrust legislation in the U.S. is the:
7. The Sherman Act of 1890 outlawed:
8. Which antitrust act provided that injured parties could file suit and, if successful, collect
triple damages from monopolistic violators?
Chapter 18 – Antitrust Policy and Regulation
9. The legislation that prohibited “every contract or conspiracy in restraint of trade and
commerce ” is the:
10. Those who may file antitrust lawsuits against violators of the Sherman Act include the
following, except:
11. Which act specifically outlawed price discrimination when such discrimination is not
justified on the basis of cost differences and when it reduces competition?
Chapter 18 – Antitrust Policy and Regulation
12. Tying contracts, which is prohibited under the Clayton Act, refers to the situation where a
producer requires that a buyer:
13. If a buyer who wants product A is required by the seller to buy its products B and C as
well, this is called:
14. Suppose that you own a toy store and want to buy 100 talking robots. Your supplier will
sell you the robots if you also agree to buy 200 dolls. This is an illegal practice called:
Chapter 18 – Antitrust Policy and Regulation
15. Which of the following gave the Federal Trade Commission and the U.S. Justice
Department the responsibility to enforce antitrust laws?
16. Which act sharpened and clarified the provisions of the Sherman Act, and sought to
outlaw the techniques that firms might use to gain monopoly power?
17. A major shortcoming of the Sherman Act was that:
Chapter 18 – Antitrust Policy and Regulation
18. Interlocking directorates refers to a situation where:
19. The legislation which prohibits the acquisition of assets of another company if the
transaction would significantly reduce competition, thereby closing a loophole in the Clayton
Act is the:
20. The legislation which prohibited acquisition of stock of another company if this would
significantly lessen competition is the:
Chapter 18 – Antitrust Policy and Regulation
21. Anti-competitive price discrimination, interlocking directorates, and tying contracts were
banned by the:
22. The administrative agency charged with enforcing the provisions of the Clayton Act
(1914) was established by additional legislation in the same year. This legislation was the:
23. The agency responsible for investigating instances of fraudulent or misleading advertising
is the:
Chapter 18 – Antitrust Policy and Regulation
24. The Clayton Act prohibits the acquisition of ____________ of competing corporations
when the acquisition would lessen competition; the Celler-Kefauver Act prohibits the
acquisition of ____________ of one firm by another firm when the acquisition would lessen
competition.
25. Which of the following does not necessarily violate antitrust laws?
26. Differences in the applications of antitrust laws are in part rooted on the issue of focus.
That is, there is a question of which aspect the antitrust laws should focus on:
Chapter 18 – Antitrust Policy and Regulation
27. Differences in the applications of antitrust laws are in part rooted on the issue of how
broadly antitrust authorities should define the:
28. In the 1911 Standard Oil case, the U.S. Supreme Court found Standard Oil:
29. The rule of reason, based on the 1920 U.S. Steel case, stipulates that a merger of two firms
in an industry is:
Chapter 18 – Antitrust Policy and Regulation
30. The U.S. Steel case of 1920 and the Alcoa case of 1945 dealt with which antitrust issue?
31. The argument that an industry which is highly concentrated will not necessarily act like a
monopolist, as expressed in the 1920 U.S. Steel case, suggests that the application of antitrust
laws should be based on industry:
32. The view that the mere possession of monopoly power, as in the Alcoa case of 1945, is a
violation of the antitrust laws suggests that the application of antitrust laws should be based
on industry:
Chapter 18 – Antitrust Policy and Regulation
33. The so-called rule of reason in interpreting antitrust legislation suggests that the
application of antitrust laws should be based on industry:
34. Which of the following cases established that the mere possession of monopoly power
violated antitrust laws?
35. Which of the following U.S. Supreme Court cases ruled that only monopolies that
“unreasonably restrain trade” are violating antitrust laws?
Chapter 18 – Antitrust Policy and Regulation
36. Intel’s monopoly in the sale of microchips for personal computers would be considered:
37. The decision on the DuPont cellophane case of 1956 dealt with the issue of:
38. One main difference in the rulings on the 1945 Alcoa case and the 1956 Dupont
cellophane case is that the Alcoa case:
Chapter 18 – Antitrust Policy and Regulation
39. The “active perspective” in antitrust policy strongly espouses in the following beliefs,
except:
40. The “laissez-faire perspective” in antitrust policy strongly espouses in the following
beliefs, except:
41. The idea that competition is insufficient in some circumstances to achieve allocative
efficiency, and to ensure fairness to consumers and competing firms, is most closely
associated with which anti-trust perspective?
Chapter 18 – Antitrust Policy and Regulation
42. In the 1982 AT&T antitrust case, the resolution was an out-of-court settlement involving
a:
43. In the 2000 Microsoft antitrust case, the eventual resolution involved a:
44. Conglomerate mergers are combinations of:
Chapter 18 – Antitrust Policy and Regulation
45. A merger between one firm and another firm that is its supplier is known as a:
46. A merger between McDonald’s and Burger King would be an example of a:
47. If Tyson Corporation, a firm that grows and processes chickens, combines with Kentucky
Fried Chicken, the resulting merger would be an example of a:
Chapter 18 – Antitrust Policy and Regulation
48. An example of a horizontal merger is one between an airline and:
49. The merger of a firm in one industry with another firm in the same industry that sells
similar products is called a:
50. Which type of merger is most likely to be the focus of antitrust scrutiny and enforcement?
Chapter 18 – Antitrust Policy and Regulation
51. Which of the following indexes is used in Federal merger guidelines?
52. The sum of the squared values of market shares of firms in an industry is referred to as
the:
53. The Herfindahl index measures the:
Chapter 18 – Antitrust Policy and Regulation
54. An industry has a single firm, and is found to have violated antitrust laws. The
government breaks its up into two firms that will share the market equally. The Herfindahl
index for this industry would change from:
55. An industry has five firms, each with a market share of 20 percent. There is no foreign
competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If
two of the firms in the industry seek to merge, this action would most likely be opposed by
the government because the Herfindahl index for the industry is:
56. If the market is defined more narrowly to only include a more restricted range of products,
then the Herfindahl index will:
Chapter 18 – Antitrust Policy and Regulation
57. The argument that an industry that is highly concentrated will act like an anti-competitive
monopolist would support the case that the application of antitrust laws should be based on
industry:
58. In recent years, the most strict use of antitrust laws has been for:
59. Per se violations in antitrust law refer to: