Happy City has three distributors of milk products

| March 14, 2016

Question
Question 1
If a manufacturer of television sets acquires a magazine publisher, it will be a

vertical merger

horizontal merger

conglomerate merger

product-line
5 points

Question 2
Happy City has three distributors of milk products. Sam, who owns a grocery store, angers one of the distributors when he insists that additional milk be delivered on Christmas Eve. He annoys another distributor when he makes a delivery driver wait to deliver milk. The three distributors get together and discuss the fact that they like all the other grocers in town better than Sam. One of them has an idea that they should stop selling milk products to Sam. The milk distributors call their friends the meat distributors and talk them into not selling meat to Sam either. Sam hears about the plot and wants to stop it. Which of the following best describes the agreements between the distributors of milk and meat to not sell to Sam?

It would likely be a boycott

It would likely be a horizontal distribution agreement

It would likely be a vertical distribution agreement

There is no descriptive term in antitrust law since this is simply an agreement among sellers who do not legally have to sell to any particular buyer.
5 points

Question 3
Section 2 of the Sherman Act prohibits

price discrimination.

monopolies and attempts to monopolize.

every contract, combination or conspiracy in restraint of trade.

mergers that threaten competition.
5 points

Question 4
An equilibrium in which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps form their use is _________.

productive efficiency

allocative efficiency

true efficiency

product efficiency
5 points

Question 5
The agreement of all the commercial airlines not to lower their fares would be an example of a

vertical restraint of trade.

horizontal restraint of trade.

tying arrangement.

monopoly.
5 points

Question 6
Which of the following is true regarding enforcement under the antitrust laws?

The U.S. Department of Justice and the Federal Trade Commission act as enforcement agents for the federal antitrust laws.

Only the U.S. Department of Justice acts as an enforcement agent for the federal antitrust laws.

Only the Federal Trade Commission acts as an enforcement agent for the federal antitrust laws.

The U.S. Department of Justice and the Consumer Fairness Commission act as enforcement agents for the federal antitrust laws.
5 points

Question 7
A manufacturer that sells its goods both wholesale and at retail is called a(n)

conglomerate merger.

dual distributor.

essential facility.

franchise.
5 points

Question 8
A[n] ______ is made up of product or service offerings by different manufacturers or sellers that are economically interchangeable and may therefore be said to compete.

interchangeable-brand product market

market power interchange

multiple-brand product market

A consumer surplus brand market
5 points

Question 9
The __________ concludes that market forces defeat most anticompetitive practices.

Chicago School

Antitrust School

Contra-antitrust School

Economic Forecasting Model
5 points

Question 10
_________ competition is competition between companies producing the same type of product.

Intrabrand

Interbrand

Vertical

Oriented
5 points

Question 11
Number One Oil Company sells gas to various gas stations. Number One requires that the gas stations agree that they will not sell gas above a certain maximum price set by Number One. Some of the gas stations are unhappy with the arrangement because they wish to sell gas at any price they choose. Unfortunately for them, other oil companies in the region also impose maximum price restrictions. The station owners begin investigating whether any antitrust violation could be involved. Which of the following best describes the situation by which Number One Oil Company and other companies impose maximum price restrictions?

Horizontal price-fixing

Vertical price-fixing

Adverse price-fixing

There is no antitrust term for the practice.
5 points

Question 12
What was the first U.S. antitrust law?

The Hart-Scott-Rodino Antitrust Improvements Act

The Robinson-Patman Act

The Clayton Act

The Sherman Act
5 points

Question 13
With a(n) ________ distributorship, a manufacturer limits itself to a single distributor in a given territory.

dual

exclusive

franchise

market-power
5 points

Question 14
Which of the following is true regarding monopoly law in China?

Each offense is specifically set forth with no catch-all provisions.

It is not used against foreign investors.

It prevents behavior classified as abuse of dominant market position.

China lacks an anti-monopoly law although drafting has been in process for several years.
5 points

Question 15
Which of the following refers to the principle that unless barriers to entry or other factors make a market structurally conducive to monopolization, pricing below cost is not a Sherman Act violation, regardless of whether the defendant had monopolistic intent?

The principle of certainty

The principle of uncertainty

The rule of improbability

The rule of impossibility
5 points

Question 16
Number One Oil Company sells gas to various gas stations. Number One requires that the gas stations agree that they will not sell gas above a certain maximum price set by Number One. Some of the gas stations are unhappy with the arrangement because they wish to sell gas at any price they choose. Unfortunately for them, other oil companies in the region also impose maximum price restrictions. The station owners begin investigating whether any antitrust violation could be involved. Which of the following is true regarding whether the imposition of maximum prices under the facts presented would be an antitrust violation?

The U.S. Supreme Court has ruled that such restrictions do not violate federal antitrust law.

The imposition of maximum pricing restrictions is per se illegal under federal antitrust law.

A rule of reason approach is used in determining whether the imposition of maximum prices is illegal under federal antitrust law.

A presumption of reasonableness approach is used in determining whether the imposition of maximum prices is illegal under federal antitrust law.
5 points

Question 17
Which of the following is true regarding conscious parallelism?

Proof, standing alone, that firms changed prices at the same time is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms initially set prices at the same levels.

Proof, standing alone, that firms initially set prices at the same levels is sufficient to prove a horizontal conspiracy to set prices regardless of whether the firms later changed prices at the same time.

Showing that firms consistently set prices at the same levels and change prices at the same time is sufficient to prove a horizontal conspiracy to set prices.

Merely showing that firms consistently set prices at the same levels and change prices at the same time is insufficient to prove a horizontal conspiracy to set prices.
5 points

Question 18
In the European Union, the principal rules of competition law are set forth in which of the following?

The Treaty of Amsterdam and the Merger Control Regulation

The European Union Regulation and the Treaty of Amsterdam

Only the European Union Regulation

Only the Treaty of Amsterdam
5 points

Question 19
Which of the following is the objective of the rule of reason rule?

To determine whether the requirements of the per se rule have been satisfied.

To determine whether, on balance, the activity at issue promotes or restrains competition.

To determine whether in a particular situation a horizontal price fixing has actually harmed consumers.

To determine if providers of a good acted reasonably in engaging in a boycott.
5 points

Question 20
Which of the following is not true regarding Section 2 of the Sherman Act?

Unilateral conduct may violate Section 2.

Section 2 allows the mere possession of monopoly power.

A firm violates Section 2 even if attains the monopoly power by superior performance.

The offense of monopolization has two elements: monopoly power and proof that the defendant willfully acquired or maintained that power through anticompetitive acts

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