21) The first antitrust law in the United States was the
A) Clayton Act.
B) Contestable Markets Act.
C) the Federal Trade Commission Act.
D) Sherman Antitrust Act.
22) The idea behind antitrust legislation is to
A) promote competition in the market.
B) justify deregulation of industries.
C) implement contestable markets.
D) create larger firms.
23) If antitrust legislation is successful, then
A) firms will produce the quantity at which marginal cost equals marginal revenue.
B) most firms will be earning a positive economic profit.
C) the price of each item will equal its marginal social opportunity costs.
D) natural monopoly will be eliminated.
24) If antitrust legislation is successful, then the monopolistic firm will
A) decrease output and charge a lower price than before.
B) increase output and charge a higher price than before.
C) increase output and charge a lower price than before.
D) decrease output and charge a higher price than before.
25) Why is antitrust legislation necessary?
A) Monopolies tend to misallocate resources.
B) All monopolies are unlawful in the United States.
C) Monopolies tend to allocate resources in a socially optimal manner.
D) Monopolies will always make a profit in the long run.
26) Which of the following will NOT be true if the antitrust laws are successful?
A) Producers will earn zero economic profits in the long-run.
B) Firms will not restrict output.
C) Firms will produce the competitive output.
D) Firms will produce the quantity at which marginal cost equals marginal revenue and charge a
price that is greater than marginal cost.
27) The Sherman Antitrust Act was passed to
A) protect companies from foreign competition.
B) protect the monopoly profits of firms.
C) control the growth of monopolies in the U.S.
D) prevent market price from equaling marginal cost.
28) Section 1 of the Sherman Antitrust Act makes it illegal to
A) form a monopolistically competitive firm.
B) restrain trade.
C) price discriminate.
D) have an oligopoly.
29) As a result of a conviction under the Sherman Antitrust Act, Standard Oil of New Jersey
A) was fined for its extensive price discriminating activity.
B) was restrained from oil exploration for twenty-five years, which enabled other oil firms to
assume leadership in the industry.
C) was broken up into many smaller companies.
D) went bankrupt and no longer is in existence.
30) What is the relationship between the Sherman Antitrust Act and the Clayton Act?
A) The Clayton Act was the first act passed and the Sherman Antitrust Act was the second.
B) The Sherman Antitrust Act encouraged competition among firms in the U.S. while the
Clayton Act encouraged competition among foreign firms.
C) The Clayton Act strengthened the Sherman Antitrust Act by limiting some very specific
business practices.
D) Both Acts deal with issues of setting price and quantity for regulated industries.
31) It is illegal to price discriminate EXCEPT in cases in which the price differences are due to
actual cost differences. This situation is due to which antitrust act?
A) Clayton Act
B) Contestable Market Act
C) Federal Trade Commission Act
D) Sherman Antitrust Act
32) The “Chain Store Act” is a name given to the
A) Clayton Act.
B) Federal Trade Commission Act.
C) Robinson-Patman Act.
D) Sherman Antitrust Act.
33) “Unfair or deceptive acts or practices in commerce” were prohibited by the
A) Clayton Act.
B) Clayton Act as amended by the Robinson-Patman Act.
C) Federal Trade Commission Act.
D) 1938 amendment to the Federal Trade Commission Act.
34) The FTC is
A) the act that prevents producers from driving out smaller competitors by means of selected
discriminatory price cuts.
B) the commission that investigates unfair competitive practices such as misleading advertising.
C) an agency which has been set up to regulate the federal government.
D) the agency set up to regulate hospitals.
35) Ajax Corporation has just started advertising that there are 16 ounces in every package. In
reality the packages contain only 14 ounces. This misleading advertising
A) is in violation of the Robinson-Patman Act.
B) is exempt from the antitrust laws.
C) could be subject to an investigation by the Federal Trade Commission.
D) could be subject to an investigation by the Sherman Commission.
36) Which of the following are exempt from the antitrust laws?
A) colleges and universities
B) all professional athletes
C) labor unions
D) deregulated industries
37) All of the following are exempt from antitrust enforcement EXCEPT
A) professional baseball.
B) labor unions.
C) hospitals.
D) television and radio stations.
38) The first antitrust law in the United States was the
A) Glass-Steagall Act.
B) Robinson-Patman Act.
C) Clayton Act.
D) Sherman Act.
39) There are many exemptions from antitrust laws. Which of the following is NOT one of
them?
A) labor unions
B) public utilities
C) hospitals
D) Internet service providers
40) The statement “Every contract, combination in the form of a trust or otherwise, or
conspiracy, in restraint of trade or commerce . . .” is found in the
A) Sherman Antitrust Act.
B) Clayton Antitrust Act.
C) Robinson-Patman Act.
D) Interstate Commerce Commission Act.
41) In a court decision in June 2001, the Federal District Count of Appeals in Washington, D.C.
found that Microsoft had violated the
A) Clayton Act.
B) Robinson-Patman Act.
C) Sherman Act.
D) Celler-Kefauver Act.
42) The antitrust legislation that forbids a company from selling goods on the condition that the
purchaser must deal exclusively with that company is the
A) Sherman Act.
B) Robinson-Patman Act.
C) Fair Trade Commission Act.
D) Clayton Act.
43) The agency that deals with issues of “unfair and deceptive acts or practices in commerce” is
the
A) Federal Trade Commission.
B) Federal Products Commission.
C) Federal Consumer Protection Agency.
D) Federal Advertising Commission.
44) One organization in the United States today that is exempt from antitrust laws is
A) the automobile industry.
B) professional baseball.
C) the oil industry.
D) the steel industry.
45) The Sherman Antitrust Act of 1890 prohibited
A) export tariffs.
B) attempts to restrain trade.
C) all existing monopolies.
D) interstate commerce.
46) The Sherman Antitrust Act was enforced in 1906 by a ruling of the Supreme Court regarding
the monopolization of the oil industry by
A) Getty Oil of Oklahoma.
B) Texaco Oil of Texas.
C) Gulf Oil of Pennsylvania.
D) Standard Oil of New Jersey.
47) The law passed by Congress in 1914 that was designed to sharpen or define further the
vagueness of the Sherman Act is called
A) the Robinson-Patman Act.
B) the Wheeler-Lea Act.
C) the Clayton Act.
D) the Federal Trade Commission Act.
48) The act of Congress which prohibited “unfair or deceptive acts or practices in commerce” is
called
A) the Federal Trade Commission Act of 1914.
B) the Clayton Act.
C) the Sherman Act.
D) the Robinson-Patman Act.
49) Another name for the “Chain Store Act” is
A) the Sherman Antitrust Act of 1890.
B) the Clayton Act of 1914.
C) the Federal Trade Commission Act of 1914.
D) the Robinson-Patman Act of 1936.
50) Which of the following organizations is exempt from prosecution under the Sherman
Antitrust Act (1890)?
A) retailers
B) book publishers
C) labor unions
D) television stations
51) The Sherman Act
A) prohibited banks from crossing states lines.
B) prohibited railroads from transporting explosives.
C) provided for the regulation of natural monopolies.
D) declared that monopolization and restraint of trade were illegal.
52) Which of the following is illegal according to the antitrust laws?
A) output restrictions
B) price discrimination based on cost differences
C) vertical mergers
D) price fixing
53) The Supreme Court’s decision in the Standard Oil of New Jersey case was
A) to force the company to send refund checks to customers.
B) to force the company to pay $10 billion in fines.
C) to increase the fine imposed by a lower court.
D) to break up the company.
54) Suppose that smart phone producers meet secretly and agree to issue the smart phones of
their most successful models sequentially and at the same price that maximizes their profits.
After hearing about the secret meeting the U.S. Justice Department is most likely to file charges
under the
A) Sherman Act.
B) Wheeler-Lea Act.
C) Robinson-Patman Act.
D) FTC Act.
55) Which of the following acts outlawed selling products at “unreasonably low prices” with the
intent of reducing competition?
A) Sherman Act
B) FTC Act
C) Robinson-Patman Act
D) Wheeler-Lea Act
56) All of the following are exempted from antitrust laws EXCEPT
A) labor unions.
B) Microsoft Windows.
C) professional baseball.
D) hospitals.
57) All of the following are exempt from antitrust lawsuits EXCEPT
A) labor unions.
B) professional baseball.
C) public transportation.
D) software developers.
58) The first antitrust law that the U.S. Congress enacted was
A) the Clayton Antitrust Act.
B) the Sherman Antitrust Act.
C) the Robinson-Patman Act.
D) the Federal Trade Commission Act.
59) A retail store cuts the prices of the products it sells to force its competitor to leave the
market. This is prohibited by the
A) Sherman Act.
B) Robinson-Patman Act.
C) Aldrich Act.
D) FTC Act.