Identify the trade-restraining practice that this example demonstrates. Two retailers decide that they will both sell no more than 100 premium TVs...
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Identify the trade-restraining practice that this example demonstrates.

Two retailers decide that they will both sell no more than 100 premium TVs per month in order to maintain the quality image of the TVs.

  • No illegal practice
  • Division of markets
  • Illegal boycott
  • Controlling output
  • Price fixing


Identify the trade-restraining practice that this example demonstrates.

Tubifor, Inc. purchases all available imported lumber so it can resell it at a quantity and rate that it prefers.

  • Controlling output
  • Illegal boycott
  • Price fixing
  • No illegal practice
  • Division of markets


Luanicorp wants to increase its profitability. It agrees with another company, Wescorp, to divide the market so that all customers north of a state line must come to one company for services, and all customers south of the state line must go to the other. The companies will then be free the deal with their customers as they wish. Which of the following is true of this situation?

  • This may be illegal under the rule of reason.
  • This is legal.
  • This is illegal per se.


Identify the trade-restraining practice that this example demonstrates.

Company A and Company B discuss average industry prices.

  • Illegal boycott
  • Controlling output
  • No illegal practice
  • Price fixing
  • Division of markets


Millcorp sells wetsuits for deep sea divers. It recently engineered a new material for its wetsuits to better hold in the wearer's body heat. After a close encounter with a shark, a customer discovers that the new material protects against shark bites - an unintended benefit that Millcorp was not aware of. Soon after, Millcorp's sales explode and it achieves 90% market share in diver wetsuits. Which of the following best describes this situation?

  • Millcorp can likely be found guilty of pursuing monopoly power.
  • Millcorp does not have a monopoly.
  • Millcorp has a lawful natural monopoly
  • Millcorp has a lawful innocent acquisition of a monopoly.


A government agency which administers rules concerning clean housing projects wants to specify and explain the language it uses to communicate with the public and enforce its statutes. Which of the following is true?

  • The agency must have a public hearing where it explains the statutory language it uses.
  • The agency must hold a public comment period for the public to weigh in on the impact and details of the statute.
  • The agency does not need to invite public opinion on the information it will post.


Decide the legality of the company's decision or action in the following situation:

Vericorp wants to increase its profitability. It rearranges its distribution services so that it can serve customers in certain areas better, while leaving other areas where competitors are stronger unattended. The company makes no agreement with a competitor in doing so. Which of the following is true of this action?

  • This is legal.
  • This is illegal per se.
  • This may be illegal under the rule of reason.


For the scenario below, determine the legality of the company's actions.

Lilcorp manufactures budget speaker systems for Bigcorp. It arranges an agreement wherein Bigcorp may not charge more than $300 for a speaker system.

  • Legal
  • Strictly illegal
  • Illegal, depending on impact


For the scenario below, determine the legality of the company's actions.

Ioncorp sells cabinets nationwide to the furniture company Blinkorp. It makes an agreement that Blinkorp will only sell Ioncorp cabinets in its warehouses. 

  • Strictly illegal
  • Legal
  • Illegal, depending on impact


Identify the trade-restraining practice that this example demonstrates.

Company A and Company B both work in the candy industry. They agree that Company A will only sell chocolate to Company C and Company B will only sell fruit candies to Company C. 

  • Price fixing
  • No illegal practice
  • Illegal boycott
  • Controlling output
  • Division of markets


Government agencies generally have power to do all but which of the following?

  • Enforce punishments for violators of public policy.
  • make a new agency in order to address important goals under the mandate of the law which created the agency.
  • Enforce substantive laws after following a predesignated procedural law process.
  • Make definitions concerning acceptable and unacceptable parameters within the scope of the agency's purpose.


Gilcorp wants to increase its profitability. It tries to gain new customers by offering a cash bonus to customers who switch to its service from another company. Which of the following is true of this action?

  • This may be illegal under the rule of reason.
  • This is legal.
  • This is illegal per se.


Determine which type of merger has occurred for this scenario.

GrillerTech manufactures propane grills for cooking. It wants to form a merger with Tinseltech, a party favor manufacturing company. This would be a __________ merger.

  • Market extension
  • Vertical
  • Conglomerate
  • Horizontal


For the scenario below, determine the legality of the company's actions.

Wreckorp wants to maintain an exclusivity image for its product line of sports equipment. It limits its distribution to 100 stores in each region.

  • Impossible to determine legality based on the information provided
  • Strictly Legal
  • Strictly Illegal


Blinkorp is selling toys to retailers across the nation. Depending on the season, the company may make its toys with either higher-cost domestic plastics or lower-cost foreign plastics. The retailers who purchase from Blinkorp complain about the different prices caused by the differently-priced materials. Which of the following is true?

  • Blinkorp is engaging in price discrimination against the retailers and must equalize its prices.
  • Blinkorp is justified in charging different prices because of the differing production costs.
  • Blinkorp is justified in charging different prices because the toy industry is so flexible and fluid.
  • Blinkorp is justified in charging different prices because it needs to meet the price of competition nationwide.

Flippatech is a home furnishings manufacturer. It wants to form a merger with SleepzCorp, another home furnishings manufacturer. This would be a __________ merger.

  • Market extension
  • Horizontal
  • Conglomerate
  • Vertical


For the scenario below, determine the legality of the company's actions.

Guncorp is selling rifles to a retailer Sportsacorp. In order for Sportsacorp to purchase a shipment of rifles, Guncorp requires that Sportsacorp also purchase a shipment of pistols.

  • Strictly illegal
  • Illegal, depending on impact
  • Legal
  • Impossible to determine legality


Funtech is a toy manufacturer. It wants to form a merger with one of the toy stores that buys its toys. This would be a __________ merger.

  • Vertical
  • Horizontal
  • Conglomerate
  • Market extension


Gillcore is about to go public and begin selling securities. As a new public company, what steps must Gillcore take in order to stay in line with the requirements of the Securities Act?

  • The company's obligations depend on what type of company it is and what type of securities it is offering.
  • This company must file a registration statement and prospectus with the SEC.
  • As a new public company it does not need to take any special action.


Fancorp regularly trades in securities on a national exchange.Which of the following is true concerning the company's requirement to report to the SEC?

  • Must file annual and quarterly financial reports; no other requirements
  • Required to report major business developments and must file annual and quarterly financial reports.
  • Not required to report information to the SEC.


Jewelcorp just began trading securities. The company is a closely-held corporation that is not trading stock on a national securities exchange. It has several dozen shareholders and $9 million in assets. Which of the following is true concerning the company's requirement to report to the SEC?

  • Not required to report information to the SEC.
  • Required to report major business developments and must file annual and quarterly financial reports.
  • Must file annual and quarterly financial reports; no other requirements


Yittercorp regularly trades in securities on a national exchange. The company is a widely-held corporation with 600 shareholders and $15 million in assets. Which of the following is true concerning the company's requirement to report to the SEC?

  • Not required to report information to the SEC.
  • Must file annual and quarterly financial reports
  • Required to report major business developments and must file annual and quarterly financial reports.


Which of the following places the events in the correct order?

  • Amendment of rule proposal; Rule adoption; Concept release; Rule proposal; Public comment period
  • Public comment period; Concept release; Rule proposal; Amendment of rule proposal; Rule adoption
  • Rule adoption; Concept release; Rule proposal; Public comment period; Amendment of rule proposal
  • Concept release; Rule proposal; Public comment period; Amendment of rule proposal; Rule adoption


Chloe has her own office where she generates investment advice for companies. She is compensated for her advice. Which of the following is false?

  • Chloe does not have to be a registered adviser if all of her clients are in the same state as her office.
  • Chloe does not have to be a registered adviser if she doesn't have authority to make investment choices for her clients.
  • Chloe does have to be a registered adviser even if she only advises for one company.


Kathleen works for an accounting firm, Securate, as an auditor. Kathleen's firm provides many services including auditing servicesinvestment consulting, and tax assistance. Kathleen is working on an audit for a company that Securate also does consulting for. Which of the following is true?

  • Kathleen may assist in consulting services for the company without restriction.
  • Kathleen may not assist in consulting for the company.
  • Kathleen may not assist in consulting services for the company unless she is an officer in the company.


Bekah is an adviser for the company Vicoltech, which deals heavily in investments. Bekah also advises several other clients in her state, but no clients outside of her stateBefore the Dodd-Frank Act was passed, Bekah was exempt from registration and reporting requirements with the SEC. When the Dodd-Frank Act was passed:

  • Bekah was required to register with the SEC, but not required to report information to the SEC.
  • Bekah was still exempt from the SEC's reporting requirements.
  • Bekah was required to begin reporting information to the SEC.


Bernie just started a business and is trying to raise capital. He has both accredited and non-accredited investors investing in the company. What constraints on investments for new businesses apply here?

  • Investors may invest no more than $1 million combined for the first year of the business.
  • Investors' allowable investment depends on the accredited or non-accredited status.
  • Investors may invest a combined $50 million within a 12-month period.


Wendy wants to start a business. She knows many unaccredited investors who she knows will help her jumpstart her business. What constraints on investments for new businesses apply here?

  • Investors' allowable investment depends on the accredited or non-accredited status.
  • Investors may invest a combined $50 million within a 12-month period.
  • Investors may invest no more than $1 million combined for the first year of the business.


Horace is trying to start a business. He knows several accredited investors who he knows will help him jumpstart his business. What constraints on investments for new businesses apply here?

  • Investors may invest no more than $1 million combined for the first year of the business.
  • Investors may invest a combined $50 million within a 12-month period.
  • Investors' allowable investment depends on the accredited or non-accredited status.


Determine the legality of the transaction.

KlineCorp wants to conduct business with Company B in another country. While visiting Company B, the management team of Company A offers some of the foreign employees some free products from their company.

  • Illegal bribe
  • Legal or illegal, depending on the purpose
  • Legal bribe


The citizens of France, Belgium, and Finland are upset by a recent trade law enacted in the European Union which they feel negatively impacts their respective economies. In order to resolve their concerns, they would turn to:

  • The European Commission
  • The European Council
  • The European Parliament


Determine the legality of the transaction.

Tichatech is trying to pierce the global marketplace. When the CEO meets with a foreign prime minister, he offers him a vacation package to show his goodwill toward the country. 

  • Legal bribe
  • Legal or illegal, depending on the purpose
  • Illegal bribe


Nation A has a political dispute with Nation B. The nations are at odds, but they agree to let a mediator hear the dispute. Both are members of the UN. Which group would hear and decide on the nations' dispute?

  • The Security Council
  • The Secretariat
  • The General Assembly
  • The International Court of Justice

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