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Chapter 11: Antitrust Law

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Chapter 11: Antitrust Law

8 problems · 0 figures

11-1 §11.AQ source ↗

All of the following are forms of restraint of trade that company might use to reduce competition except:
  1. a.
    Monopolies.
  2. b.
    Oversupply.
  3. c.
    Price-fixing.
  4. d.
    Mergers.

Answer

B. Oversupply.

11-3 §11.AQ source ↗

Distinguish between naked restraint and ancillary restraint.

Answer

Naked restraint occurs as contracts promote a general restraint of competition. If the restraint was created with a goal of long-term impact without boundaries, it was considered to be a naked restraint. Ancillary restraint occurs as the restriction is limited in time and geography. With ancillary restraint, the restraint would be short-term and limited in scope. The courts tended to frown upon naked restraint, but were less consistent with ancillary restraint.

11-5 §11.AQ source ↗

What was the original purpose of antitrust legislation?

Answer

The original purpose of antitrust legislation, i.e., to foster competition that results in lower prices, more products, and more equal distribution of wealth between producers, remains relevant today.

11-7 §11.AQ source ↗

Each state has its own Antitrust law.
  1. a.
    True.
  2. b.
    Fasle.

Answer

B. Fasle.

11-9 §11.AQ source ↗

Which of the following are possible penalties for violation of the Sherman Act?
  1. a.
    Up to $100 million for corporations and individuals.
  2. b.
    Up to $100 million for individuals.
  3. c.
    Up to $100 millions for corporations.
  4. d.
    None of these are correct.

Answer

C. Up to $100 millions for corporations.

11-11 §11.AQ source ↗

The following are exempt from antitrust laws:
  1. a.
    Small businesses.
  2. b.
    Coops.
  3. c.
    Labor unions.
  4. d.
    Agriculture groups even if they engage in restraint of trade.

Answer

C. Labor unions.

11-13 §11.AQ source ↗

The following are bureaus of the Federal Trade Commission except:
  1. a.
    Bureau of Unfair Trade Practices.
  2. b.
    Bureau of Consumer Protection.
  3. c.
    Bureau of Competition.
  4. d.
    Bureau Economics.

Answer

A. Bureau of Unfair Trade Practices.

11-15 §11.AQ source ↗

Explain the Wheeler-Lea Act.

Answer

The FTC did not formally have a consumer protection mission until the passage of the Wheeler-Lea Act in 1938. This act gave the FTC the power to combat false advertising for any foods, drugs, medical devices, or cosmetics. In addition to the Wheeler-Lea Act, subsequent amendments to the FTC Act, as well as judicial respect toward the agency, broadened the power and jurisdiction of the FTC.

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Problems and answers are adapted from Business Law I Essentials 2e by Mirande Valbrune, Renee De Assis and Suzanne Cardell, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/business-law-i-essentials-2e/pages/1-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.