question
Trust
answer
is a combination or cartel consisting of firms that place their assets in the custody of a board of trustees
question
predatory pricing
answer
the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
question
The Sherman Act
answer
the federal antitrust law enacted in 1890 that prohibits monopolization and conspiracies to restrain trade
question
The Clayton Act
answer
A 1914 amendment that strengthens the Sherman Act by making it illegal for firms to engage in certain anticompetitive business practices
question
Federal Trade Commission Act (1914)
answer
the federal act that in 1914 established the Federal Trade Commission (FTC) to investigate unfair competitive practices of firms.
question
The Robinson-Patman Act
answer
A 1936 amendment to the Clayton Act that strengthens the Clayton Act against price discrimination
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Celler-Kefauver Act
answer
a 1950 amendment to the Clayton Act that prohibits one firm from merging with a competitor by purchasing its physical assets if the effect is to substantially lessen competition
question
the rule of reason
answer
The antitrust doctrine that the existence of monopoly alone is not illegal unless the monopoly engages in illegal business practices
question
per se rule
answer
the antitrust doctrine that the existence of monopoly alone is illegal, regardless of whether or not the monopoly engages in illegal business practices
question
horizontal merger
answer
A merger of firms that compete in the same market
question
vertical merger
answer
A merger of a firm with its suppliers
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conglomerate
answer
A merger between firms in unrelated markets
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deregulation
answer
the elimination or phasing out of government restrictions on economic activity
question
marginal cost pricing
answer
A system of pricing in which the price charged equals the marginal cost of the last unit produced
question
Firms that place their assets in the custody of a board of trustees is called a
answer
trust
question
The antitrust law that prohibits firms from combining or conspiring to restrain trade in interstate commerce is the:
answer
Sherman Antitrust Act
question
Price discrimination that tends to lessen competition is outlawed by the:
answer
Clayton Act
question
A firm that acquires the stock of a competing firm and there is a substantial lessening of competition, would be in violation of the:
answer
Clayton Act
question
Suppose a firm offers quantity discounts or special promotional allowances only to favored distributors, and the effect is to substantially lessen competition. This firm would be in violation of the:
answer
Robinson-Patman Act
question
Under the Clayton Act, which of the following was illegal, even if it was shown not to
lessen competition substantially:
lessen competition substantially:
answer
interlocking directorates
question
The rule of reason was applied in which of the following cases?
answer
American Tobacco Trust case, U.S. Steel case, & standard oil case
question
The per se rule applied in which of the following cases?
answer
the Alcoa case
question
Which of the following mergers would result from the purchase of a paper mill by a textbook publishing company?
answer
a vertical merger
question
The Interstate Commerce Commission (ICC) was established in 1887 to regulate:
answer
railroads
question
Which of the following involved deregulation?
answer
Motor carrier act of 1982, staggers rail act of 1980, airline deregulation act
question
Under the Clayton Act, horizontal mergers by stock acquisition were:
answer
illegal if they could be shown to lessen competition
question
The importance of the Federal Trade Commission Act of 1914 is that it:
answer
set up an independent agency with the power to investigate and bring antitrust court cases
question
Which of the following deals most centrally with price discrimination?
answer
the Robinson-Patman Act
question
Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?
answer
Sherman Act of 1890
question
Which antitrust act prohibits exclusive dealing, tying contracts, stock acquisitions, and interlocking directorates?
answer
Clayton Act of 1914
question
Which of the following describes a tying contract?
answer
the seller of one product requires the buyer to purchase some other product(s)
question
Which of the following statements is true?
answer
government regulation of a natural monopoly is economically justifiable
question
The Sherman Antitrust Act outlawed tying contracts.
answer
false
question
Interlocking directorates are illegal under the Clayton Act whether or not the effect is to lessen competition substantially.
answer
true
question
Under an exclusive buying arrangement, a retailer agrees to sell a good at the manufacturer's suggested retail price.
answer
false
question
The Robinson-Patman Act strengthened the merger provisions of the Clayton Act
answer
false
question
The Utah Pie case is an example of a violation of the Robinson-Patman Act
answer
true
question
The per se rule of reason was applied in the Alcoa case
answer
true
question
The purchase of Michelin Tire Company by General Motors is an example of a horizontal merger
answer
false
question
Antitrust laws in other countries are much stronger than U.S. antitrust laws
answer
false
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