TBCh17F - CHAPTER 17 Antitrust TRUE-FALSE QUESTIONS 1....

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C H A P T E R 1 7 Antitrust T RUE -F ALSE Q UESTIONS 1. Bright lines that clearly separate lawful from unlawful in the antitrust field are rare. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 2. The Sherman Act, passed in 1910, was the first U.S. antitrust law. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 3. The Sherman Act was passed as part of a populist movement to combat the rise of trusts in such basic industries as oil and steel. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 4. In order to avoid an unworkable construction of the Sherman Act, the courts have construed Section 1 to prohibit only those restraints of trade that unreasonably restrict competition. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 5. In order to find a violation of the Sherman Act, courts require evidence of an explicit agreement to violate the law. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 6. Courts look more favorably on reductions in intrabrand competition when there is vigorous interbrand competition that can prevent the reduction in intrabrand competition form harming consumers. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 7. Fines, but not jail time, may be imposed for price-fixing in violation of the Sherman Act. ANSWER: False SKILL LEVEL: AACSB Analytic 235
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236 MANAGERS AND THE LEGAL ENVIRONMENT OBJECTIVE: AICPA Legal 8. Horizontal agreements among competitors not to compete on nonprice matters cannot be a violation of Section 1 of the Sherman Act. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 9. Firms can incur liability under Section 2 of the Sherman Act by acquiring monopoly power through corporate mergers or acquisitions. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 10. The classic definition of conspiracy focuses on whether the alleged conspirators had a meeting of the minds in a scheme that violates the law. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 11. The Supreme Court considers market divisions between competing firms to be so inherently anti- competitive as to constitute per se violations of the Sherman Act. ANSWER: True SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 12. The courts are more likely to allow a restraint of interbrand competition than intrabrand competition. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 13. The merger of an airplane manufacturer and an airplane engine manufacturer would normally be considered a conglomerate merger. ANSWER: False SKILL LEVEL: AACSB Analytic OBJECTIVE: AICPA Legal 14. The Robinson-Patman Act prohibits a manufacturer from making any price discrimination among its customers. ANSWER:
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TBCh17F - CHAPTER 17 Antitrust TRUE-FALSE QUESTIONS 1....

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