Chapter23_Antitrust_Law_and_Promoting_Competition

True i/ iFalse 1. iAntitrust ilegislation iwas icreated ibecause iof ithe ibelief ithat icompetition ileads ito ilower iprices. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Introduction LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflective iThinking: iRe i- iBUSPROG: iReflective iThinking LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iCritical iThinking KEYWORDS: i i Bloom's: iKnowledge 2. iThe iSherman iAct, ithe iClayton iAct iand ithe iFederal iTrade iCommission iAct iare iall iexamples iof ilegislation idesigned ito icurb ianticompetitive ibusiness ipractices. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflective iThinking: iRe i- iBUSPROG: iReflective iThinking LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 3. iA irestraint iof itrade iis ian iagreement ibetween ifirms ithat ihas ithe ieffect iof ireducing icompetition iin ithe imarketplace. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 4. iThe ibasic ipurpose iof iantitrust ilaw iis ito iregulate ieconomic icompetition. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflective iThinking: iRe i- iBUSPROG: iReflective iThinking LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 5. iAn iact imust isubstantially iaffect iinterstate icommerce ito iviolate iantitrust ilaw. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 6. iAn iagreement ithat iis ideemed ia iper ise iviolation iwill ibe iexamined iby ia icourt ito idetermine iwhether ithe iagreement’s ibenefits ioutweigh iits ianticompetitive ieffects. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 7. iA iprice-fixing iagreement iis ian iagreement iby itwo ior imore isellers ito iboycott ia iparticular iperson ior ifirm. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 8. iA iprice-fixing iagreement ithat iis ireasonable idoes inot iviolate iantitrust ilaw. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 9. iA igroup iboycott iis inot ia iper ise iviolation. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 10. iA imarket idivision iby iclass iof icustomer ibetween irival ifirms iviolates iantitrust ilaw. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 11. iTerritorial iand iconsumer irestrictions iare iper ise iviolations. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 12. iResale iprice imaintenance iagreements iare isubject ito ianalysis iunder ithe irule iof ireason. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 13. iA itrade iassociation ipractice ior iagreement ithat irestrains itrade iis ianalyzed iunder ithe irule iof ireason. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 14. iSection i1 iof ithe iSherman iAct icondemns imonopolization. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 15. iPredatory ipricing iinvolves iselling ia iproduct iat iprices isubstantially iabove ithe ifair imarket ivalue. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 16. iMonopoly ipower imay ibe iproved iby ievidence ithat ia ifirm iused iits ipower ito icontrol iprices. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 17. iThe iprimary imeasure iof imonopoly ipower iis ia icompetitor’s iassessment iof ithe iacts iof ia ifirm iunder ireview. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflective iThinking: iRe i- iBUSPROG: iReflective iThinking LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 18. iMonopoly ipower iis ia iminor iamount iof imarket ipower. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 19. iSize ialone idoes inot idetermine iwhether ia ifirm iis ia imonopoly. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflective iThinking: iRe i- iBUSPROG: iReflective iThinking LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 20. iFor iproducts ithat iare isold inationwide, ithe irelevant igeographic imarket iencompasses ithe ientire iUnited iStates. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 21. iThe ipossession iof imonopoly ipower ialone idoes inot iconstitute ithe ioffense iof imonopolization. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 22. iThe iInternet iis ichanging ithe inotion iof ithe isize iand ilimits iof ia irelevant igeographic imarket. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 23. iThe ioffense iof imonopolization idoes inot irequire ithe iintent ito imonopolize. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 24. iA isingle iseller iacting iunilaterally iis ifree ito ideal, ior inot ito ideal, iwith ianyone iit ichooses. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 25. iThe iClayton iAct iprohibits icertain iclasses iof iprice idiscrimination. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 26. iCharging idifferent iprices ito idifferent ibuyers ifor iidentical igoods iis iprice idiscrimination. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 27. iUnder ian iexclusive-dealing icontract, ia iseller ipromises ia ibuyer ia icertain iterritory iin iwhich ithe ibuyer iwill ihave ino idirect icompetition. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 28. iConditioning ithe isale iof ione iproduct ion ithe ipurchase iof ianother iis ian iexclusive-dealing icontract. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 29. iIn idetermining ithe ilegality iof ia imerger, ia icrucial iconsideration iis imarket iconcentration. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 30. iMarket iconcentration irefers ito ithe inumber iof ifirms iin ithe imarket. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 31. iNo iperson imay ibe ia idirector ifor itwo icompeting icorporations iat ithe isame itime. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 32. iA idivestiture iis ian iorder ito ia icompany ito icease, ior idivest iitself iof, iits ianticompetitive iconduct. i a. i True i b. i False ANSWER: i i False POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Enforcements iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 33. iLabor iunions ican iorganize iand ibargain iwithout iviolating iantitrust ilaw. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Enforcements iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 34. iInsurance icompanies iare iexempt ifrom iantitrust ilaws iwhenever istate iregulation iexists. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Enforcements iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge 35. iCooperative iresearch iby ismall-business ifirms iis iexempt ifrom iantitrust ilaw. i a. i True i b. i False ANSWER: i i True POINTS: i i 1 DIFFICULTY: i i Easy REFERENCES: i i Enforcements iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG:Analytic:Ref: i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iKnowledge Multiple iChoice 36. iCongress ienacts ia istatute ito ioutlaw ia ispecific itype iof ianticompetitive ibusiness iagreement. iLike iother ilaws ithat iregulate ieconomic icompetition, ithis ilaw iis ireferred ito ias i a. i a ifederal itrade icommission iact. i b. i an iantitrust ilaw. i c. i an iinterstate icommerce iact. i d. i a isuppressive irestraint ion itrade. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Introduction LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 37. iNorth iMining iCompany iand iSouth iExcavation iCompany iagree ito iabide iby ithe idecisions iof iEast iCoast iFinancial iCorporation ias ito itheir irespective ilevels iof iproduction, imarkets, iand iprices, ieffectively ireducing icompetition iand iincreasing iprofits. iThis iis imost ilikely i a. i a icommon, ilegal, itime-honored itype iof ibusiness iarrangement. i b. i an iillegal irestraint ion itrade. i c. i an iinnovative, ilegally iefficient iapproach ito idoing ibusiness. i d. i an ioutdated, ibut ilegal ibusiness itrust. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 38. iTo ifall iunder ithe iSherman iAct, ian iactivity imust i a. i substantially iaffect iinterstate icommerce. i b. i involve imonopolization. i c. i promote icompetition. i d. i involve iinternational itrade. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iSherman iAntitrust iAct LEARNING iOBJECTIVES: i i LO i- i1 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG i- iAnalytic i- iBUSPROG: iAnalytic LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 39. iThermo iGas, iInc., iand iUno iOil iCorporation irefine iand isell igasoline iand iother ipetroleum iproducts. iTo ilimit ithe isupply iof igas ion ithe imarket iand ithereby iraise iprices, iThermo iGas iand iUno iOil iagree ito ibuy i“excess” isupplies ifrom idealers iand i“dispose” iof iit. iThis iis i a. i a ideal ithat ineither irestrains itrade ior iharms icompetition. i b. i a ilegal irestraint iof itrade. i c. i a iper ise iviolation iof ithe iSherman iAct. i d. i subject ito ianalysis iunder ithe irule iof ireason. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 40. iWhen iapplying ithe irule iof ireason ito idetermine iwhether ian iagreement iviolates iSection i1 iof ithe iSherman iAct, ia icourt iwill inot iconsider i a. i the ipurpose iof ithe iagreement. i b. i the iparties’ imarket iability ito iimplement ithe iagreement. i c. i the ieffect iof ithe iagreement ion iinternational itrade. i d. i the ipotential ieffect iof ithe iagreement ion icompetition. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 41. iA icourt ideems ian iagreement ibetween iSilver iSaddles iSaddlery iand iTime iTested iTack, iInc. ito ibe ia iper ise iviolation iof ithe iSherman iAct. iThe icourt iis i a. i prevented ifrom idetermining iwhether ithe iagreement’s ibenefits ioutweigh iits ianticompetitive ieffects. i b. i required ito iunanimously idecide iwhether ithe iagreement’s ibenefits ioutweigh iits ianticompetitive ieffects. i c. i required ito iapply ithe irule iof ireason. i d. i required ito iissue ia iformal icomplaint iagainst iSilver iSaddles iand iTime iTested iTack. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication Fact iPattern i39-1 i Cardio, iInc., imakes iand isells iDrawdown, ithe imost iprescribed iname-brand iheart imedication. iEmitate iCorporation ihas ithe ipotential ito imake ia igeneric iversion iof ithe isame idrug. 42. iRefer ito iFact iPattern i39-1. iCardio ipays iEmitate inot ito isell iits iproduct. iThis iis i a. i a icustomer irestriction. i b. i a ijoint iventure. i c. i an iexclusive-dealing icontract. i d. i a iprice-fixing iagreement. ANSWER: i i d POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 43. iRefer ito iFact iPattern i39-1. iA icourt iwould imost ilikely irule ithat ithe iagreement ibetween iCardio iand iEmitate iis i a. i a ideal ithat ineither irestrains itrade ior iharms icompetition. i b. i a ilegal irestraint iof itrade. i c. i a iper ise iviolation iof ithe iSherman iAct. i d. i subject ito ianalysis iunder ithe irule iof ireason. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 44. iGulf iAir, iInc., iis ithe imajor iwholesale idistributor iof isoftware iin ithe istate iof iFlorida. iIts iclosest icompetitor iis iFluid iSystems iCompany, ianother iFlorida ifirm. iThe itwo ifirms iagree ithat iGulf iAir iwill ioperate iin isouth iFlorida iand iFluid iSystems iwill ioperate iin inorth iFlorida. iThis iis i a. i a igroup iboycott. i b. i a imarket idivision. i c. i a ijoint iventure. i d. i an iexclusive-dealing icontract. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 45. iEdgy iEngine iComponents, iInc., ia imaker iof ivehicle iparts, irefuses ito isell ito iFidgety iFix-It, iInc., ia inational ivehicle iservice ifirm. iEdgy iEngine iconvinces iGreasy iMotor iParts iCompany, ia icompetitor, ito ido ithe isame. iThis iis i a. i a igroup iboycott. i b. i a imarket idivision. i c. i a ijoint iventure. i d. i an iexclusive-dealing icontract. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 46. iSome iagreements iare iso iblatantly iand isubstantially ianticompetitive ithat ithey iare ideemed iillegal iper ise iunder iSection i1 iof ithe iSherman iAct. iWhich iof ithe ifollowing iis inot ia iper ise iviolation? i a. i A iprice-fixing iagreement. i b. i A igroup iboycott. i c. i A itrade iassociation. i d. i A imarket idivision. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 47. iLightning iCycles, iInc., imakes iLightning-brand imotorcycles iand iaccessories, iwhich iare idistributed ito iauthorized idealers, iincluding iMacho iMotors, iInc. iMacho ioperates idealerships iin iseveral ilocations. iLightning iimposes irestrictions ion iMacho ito ilimit ithe iareas iin iwhich ithey isell ithe ibikes iand iinsulate iother idealers ifrom idirect icompetition. iThis iis i a. i a iterritorial irestriction. i b. i a iresale iprice imaintenance iagreement. i c. i a irefusal ito ideal. i d. i a iprice-fixing iagreement. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 48. iOrganic iCheeses, iInc., iFine i& iFresh iFoods iCompany, iand iHealthy iWhole iFoods, iInc. iorganize itogether ito iexchange iinformation iand ishare iadvertising. iThis iis ian iexample iof ia i a. i trade iassociation. i b. i resale iprice imaintenance iagreement. i c. i monopoly. i d. i territorial irestriction. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 49. iA itrade iassociation i a. i is ialways ia iper ise iviolation iof iSection i1 iof ithe iSherman iAct. i b. i may ibe ilegal iif iit iis isufficiently ibeneficial ito iboth ithe iassociation iand ithe ipublic. i c. i is ian iinnovative, ilegally iefficient iapproach ito idoing ibusiness. i d. i always icreates iillegal iterritorial ior icustomer irestrictions. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 50. iSpa iSelectiva iCompany imakes iand isells ibeauty isalon isupplies. iBy iselling iits iproduct iat iprices isubstantially ibelow ithe inormal icost iof iproduction, iSpa iSelectiva ihopes ito idrive iits icompetitors ifrom ithe imarket. iThis iis i a. i market ipower. i b. i predatory ipricing. i c. i price idiscrimination. i d. i price-fixing. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 51. iGourmet iFoods, iInc., irequires iall idistributors iof iits iproducts ito isell ithem iat ia ispecified iminimum iprice. iUnder ithe iSherman iAct, ithis iis ia iviolation i a. i if ithe ianticompetitive ieffects ioutweigh ithe icompetitive ibenefits. i b. i if ithe icompetitive ibenefits ioutweigh ithe ianticompetitive ieffects. i c. i under iany icircumstances. i d. i under ino icircumstances. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i1 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i2 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 52. iMarvin istarts iMarvin’s iBike iCompany iin iWheatland, iSouth iDakota. iThere iis ione iother ibike istore iin iWheatland. iThrough igood ibusiness imanagement, iMarvin’s iBike iCompany iobtains ia igreat ideal iof imarket ipower iin iWheatland. iThis iacquisition iof imonopoly ipower iis i a. i a iper ise iviolation iof iSection i1 iof ithe iSherman iAct. i b. i an iillegal irestraint ion itrade. i c. i not ian iantitrust iviolation. i d. i a iper ise iviolation iof iSection i2 iof ithe iSherman iAct. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Challenging REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 53. iImperio iCaffeine iCorporation imakes iand isells icoffee iunder ia ivariety iof ibrand inames. iImperio iwants ito imerge iwith iJava iCompany, iits imain icompetitor. iIn iweighing ia ichallenge ito ithe ideal, ia icourt ilooks iat ithe irelevant iproduct imarket. iThis imost ilikely iincludes icoffee iand i a. i no iother iproducts. i b. i products ithat iare inot iidentical ibut iare irelated, isuch ias ispin-offs. i c. i products ithat iare isometimes isubstituted ifor icoffee. i d. i products iwith iidentical iattributes ionly. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 54. iA isuit iis ifiled iagainst iAdroit iDrilling iTools iCorporation, ialleging ithat ithe ifirm icommitted ithe ioffense iof imonopolization. iTo idetermine iwhether iAdroit ihas imonopoly ipower irequires ilooking iat i a. i the idefinition iof imonopoly iin ithe iSherman iAct. i b. i Adroit’s isize ialone. i c. i Adroit’s iproduction imethods iand imarketing itechniques. i d. i the irelevant imarket. ANSWER: i i d POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 55. iListen iUp! iCorporation ibooks iand ipromotes iconcerts iand iother ientertainment ievents, ifor iwhich iListen iUp! ialso isells itickets. iIn iweighing ia ichallenge ito iListen iUp!’s i“monopolistic” iticket iprices, ia icourt ilooks iat ithe irelevant igeographic imarket. iThis iencompasses i a. i only iareas iin iwhich iListen iUp! idoes inot ihave imonopoly ipower. i b. i only iareas iin iwhich iListen iUp! ihas imonopoly ipower. i c. i the iarea iin iwhich iListen iUp! iand iits icompetitors isell, iand itheir icustomers ibuy, ithe itickets. i d. i the ientire iUnited iStates iin iall icases. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 56. iA isuit iis ifiled iagainst iDormroom iFurniture iUnlimited, iInc., ialleging ithat ithe ifirm ihas icommitted ithe ioffense iof imonopolization. iTo idetermine iwhether iDormroom ihas icommitted ithis ioffense, ithe icourt iwill iconsider ithe iextent iof iDormroom’s imarket ipower iand i a. i how iDormroom iacquired iits ipower. i b. i how iDormroom imakes iits iproducts. i c. i Dormroom’s icustomers. i d. i Dormroom’s isuppliers. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 57. iMaster iManufacturing iCorporation ihas iexclusive icontrol iover ithe imarket ifor iits iproduct. iUnder ithe iSherman iAct, ithis iis i a. i a iper ise iviolation. i b. i a iviolation iif iit iacquired ithis ipower ithrough i“business iacumen.” i c. i a iviolation iif iit iacquired ithis ipower ithrough i“anticompetitive imeans.” i d. i not ia iviolation. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 58. iTo iacquire imonopoly ipower iin iits imarket, iPerfect iPlastics, iInc., isets iits iprices ilower ithan iits icompetitors. iUnder ithe iSherman iAct, ithis iis i a. i a iper ise iviolation. i b. i a iviolation iif iits icompetitors imake isimilar ideals. i c. i a iviolation iif iit ithereby iacquires imonopoly ipower. i d. i not ia iviolation. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 59. iRally iSpeedboat iCorporation irefuses ito isell iits iproducts ito iSuper iWeekends, iInc., ia irecreational iwater iproducts idealership. iThis iis i a. i an iexclusive-dealing icontract. i b. i a ihorizontal imarket idivision. i c. i attempted imonopolization. i d. i a iunilateral irefusal ito ideal. ANSWER: i i d POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 60. iAn iantitrust iaction iis ibrought iagainst iTri-State iTransport iCompany, ialleging ithe ioffense iof iattempted imonopolization. iTo ibe iguilty iof ithis ioffense, iTri-State’s iattempt imust ihave i a. i a idangerous iprobability iof isuccess. i b. i a ideadly iguaranty iof isuccess. i c. i a idistant ipossibility iof isuccess. i d. i a idistinct iimprobability iof isuccess. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 61. iFresh iVegetables, iInc., ia iwholesaler, irefuses ito isell iits iproduce ito iGood iMart iStores, iInc., ia iretailer. iThis iis i a. i “an iunfair ior ideceptive iact ior ipractice.” i b. i a iper ise iviolation. i c. i not ia iviolation. i d. i subject ito ianalysis iunder ithe irule iof ireason. ANSWER: i i d POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 62. iA iunilateral irefusal ito ideal ican iviolate iantitrust ilaws iif ithe irefusal i a. i is ilikely ito ihave ian ianticompetitive ieffect ion ia iparticular imarket. i b. i results iin ilower iprices ifor iconsumers. i c. i provides ino ieconomic ibenefits ifor iconsumers. i d. i is ilikely ito iincrease icompetition. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Section i2 iof ithe iSherman iAct LEARNING iOBJECTIVES: i i LO i- i3 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iComprehension 63. iPrecious iMetals iCorporation, ia iraw imaterials ivendor, isells iits icommodities iin icertain iquantities ito iQuarry iRefining iCompany ifor ia icertain iprice ibut icharges iRich iAssets, iInc., ia iQuarry icompetitor, ia ihigher iprice. iThis iis imost ilikely ia iviolation iof i a. i the iClayton iAct. i b. i the iFederal iTrade iCommission iAct. i c. i the iSherman iAct. i d. i no iantitrust ilaw. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 64. iHVAC iParts iCompany icharges idifferent ibuyers idifferent iprices ifor iidentical igoods. iHVAC’s iprices iare isubject ito ievaluation iunder i a. i the iClayton iAct. i b. i the iFederal iTrade iCommission iAct. i c. i the iSherman iAct. i d. i no iantitrust ilaw. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 65. iTo idrive iits icompetitors iout iof ia icertain igeographic isegment iof iits imarket, iFryin’ iPotatoes, iInc., isets ithe iprices iof iits iproducts ibelow icost ifor ithe ibuyers iin ithat iarea. iThis iis i a. i a irefusal ito ideal. i b. i business iacumen. i c. i predatory ibidding. i d. i price idiscrimination. ANSWER: i i d POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 66. iCity iManufacturing iCorporation iconditions ishipments iof iits iproducts ito iExurb iStores, iInc., ion iExurb’s iagreement inot ito ibuy iproducts ifrom iRegional iWorks iCompany, iCity’s icompetitor. iThis iis i a. i an iexclusive-dealing icontract. i b. i a itying iarrangement. i c. i price idiscrimination. i d. i a iunilateral irefusal ito ideal. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 67. iLuminescent iSilicon iCorporation, iwhich icontrols i40 ipercent iof ithe icomputer-chip imarket iin ithe iUnited iStates, imerges iwith iMicro iProcessors, iInc., iwhich icontrols i15 iper-cent iof ithe isame imarket. iThis imerger iis ia iviolation i a. i only iif ithe iresult imore iclearly iconcentrates ithe imarket. i b. i only iif ithe iresult imakes iit imore idifficult ifor ipotential icompetitors ito ienter ithe imarket. i c. i if ithe iresult imore iclearly iconcentrates ithe imarket iand imakes iit imore idifficult ifor ipotential icompetitors ito ienter ithe imarket. i d. i under ino icircumstances. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Challenging REFERENCES: i i The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 68. iGlobal iServices iCorporation iengages iin itrade ipractices ithat imay iviolate iantitrust ilaw. iThe iFederal iTrade iCommission ihas ithe ipower ito iact iagainst iunfair itrade ipractices iunder i a. i the iClayton iAct. i b. i the iFederal iTrade iCommission iAct. i c. i the iSherman iAct. i d. i no ilaw. ANSWER: i i b POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i Enforcement iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 69. iMango iCorporation ibelieves ithat iMelon iCorporation iengages iin ianticompetitive ibehavior iin ian iattempt ito idrive iMango iand iits iother icompetitors iout iof ithe imarket. iAntitrust ilaws ican ibe ienforced iagainst iMelon iby i a. i Mango iand iits icompetitors ionly. i b. i Mango, iits icompetitors, iand ithe iFederal iTrade iCommission ionly. i c. i Mango, iits icompetitors, ithe iFederal iTrade iCommission, iand ithe iU.S. iDepartment iof iJustice. i d. i the iFederal iTrade iCommission iand iU.S. iDepartment iof iJustice ionly. ANSWER: i i c POINTS: i i 1 DIFFICULTY: i i Challenging REFERENCES: i i Enforcement iand iExemptions LEARNING iOBJECTIVES: i i LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iLegal KEYWORDS: i i Bloom's: iApplication 70. iBig iU.S. iOil iCompany ijoins iwith ia iforeign icartel ito icontrol ithe iprice iof ioil. iIf ithe icartel ihas ia isubstantial ieffect ion iU.S. icommerce i a. i both iBig iU.S. iOil iand ithe iforeign icartel ican ibe isued ifor iviolation iof iU.S. iantitrust ilaws. i b. i neither iBig iU.S. iOil inor ithe iforeign icartel ican ibe isued ifor iviolation iof iU.S. iantitrust ilaws. i c. i only iBig iU.S. iOil ican ibe isued ifor iviolation iof iU.S. iantitrust ilaws. i d. i only ithe iforeign icartel ican ibe isued ifor iviolation iof iU.S. iantitrust ilaws i. ANSWER: i i a POINTS: i i 1 DIFFICULTY: i i Moderate REFERENCES: i i U.S. iAntitrust iLaws iin ithe iGlobal iContext LEARNING iOBJECTIVES: i i LO i- i5 KEYWORDS: i i Bloom's: iApplication Essay 71. iJava iBean iCompany iimports icoffee ibeans iand isells ithem iunder itwo-year icontracts ito iMellow iRoast, iInc., iand iother icoffeemakers. iThe icontracts irequire ithat iduring ithe itwo-year iterm ia icoffeemaker inot ibuy ibeans ifrom iJava iBean’s icompetitors. iThe icontracts ido inot ilimit ithe icoffeemakers’ ipurchase iof itea ior iother ibeverage iingredients ifrom iother isuppliers, ihowever. iIn ithe isecond iyear iof ithe icontract, iMellow iRoast iprotests ithat ithis iarrangement iviolates iantitrust ilaw. iIs iMellow iRoast icorrect? iIf inot, iwhy inot? iIf iso, iunder iwhich iantitrust istatute, ior istatutes, icould ithese icontracts ibe iheld iillegal? ANSWER: i i Java iBean’s icontracts iare iexclusive-dealing icontracts. iThese icontracts imay ibe iheld iillegal iunder ithe iSherman iAct ior ithe iClayton iAct. iSection i1 iof ithe iSherman iAct iprohibits iany iagreement ithat iis ian iunreasonable irestraint iof itrade. iUnder ithis iprohibition, ia icontract iis isubject ito ithe irule iof ireason. iA icourt iwould iconsider ithe ipurpose iof ithe iarrangement, ithe ipowers iof ithe iparties, iand ithe ieffect iof itheir iactions iin irestraining itrade. iIf ithe ianticompetitive ieffects ioutweigh ithe icompetitive ibenefits, ithe icontracts iwould ibe iheld iunlawful. iSection i3 iof ithe iClayton iAct ispecifically iprohibits iexclusive-dealing icontracts iwhen itheir ieffect iis ito isubstantially ilessen icompetition ior itend ito icreate ia imonopoly. iIf ithese icontracts iare iheld ito ibe iotherwise iillegal iunder ione iof ithese istatutes, ithat ithe icontracts iare ilimited ito itwo-year iterms iand ido inot iproscribe ithe icoffeemakers’ ipurchase iof itea iand iother ibeverage iingredients ifrom iother isuppliers iare inot ifactors ithat iwould imake ithem ilegal. POINTS: i i 1 DIFFICULTY: i i Challenging REFERENCES: i i Section i1 iof ithe iSherman iAct The iClayton iAct LEARNING iOBJECTIVES: i i LO i- i2 LO i- i4 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iDecision iModeling KEYWORDS: i i Bloom's: iApplication 72. iBubbly iBottling iCompany iis iengaged iin ithe isoft-drink ibottling iand idistribution iindustry iin ithe istates iof iNew iYork iand iNew iJersey. iThe ifirm icurrently ihas iabout i40 ipercent iof ithe imarket ifor ithese iproducts iand irelated iservices. iCarbonate iDistribution iCorporation icompetes iwith iBubbly iin ithe isame istates. iCarbonate ihas iabout i35 ipercent iof ithe imarket. iIf iBubbly iwere ito iacquire ithe istock iand iassets iof iCarbonate, iwould iBubbly ibe iin iviolation iof iany iof ithe iantitrust ilaws? iIf iso, iwhich ione? iDiscuss ifully. ANSWER: i i The iClayton iAct iprohibits ithe itype iof iaction iby iBubbly isuggested iin ithis iquestion—a imerger ithat iwould iincrease imarket iconcentration. iOther ifactors iinclude ithe ioverall iconcentration iof ithe irelevant imarket, ithat imarket’s ihistory iof itending itoward iconcentration, iand iwhether ithe imerger iis iapparently idesigned ito iestablish imarket ipower ior irestrict icompetition. i iBased ion ithe ifacts istated iin ithe iquestion, imost iof ithese ifactors iare ipresent. iThus, ithe imajor iantitrust ilaw ibeing iviolated iis ithe iClayton iAct. i iThe ilaw iprohibits iany iperson ior ibusiness iorganization ifrom iacquiring ithe istock ior iassets iin ianother ibusiness iwhere ithe iresult iwould ibe ia isignificantly iincreased imarket ishare iand ithe ieffect iwould imost ilikely ibe ito isubstantially ilessen icompetition. i iThe iremoval iof ia icompetitor iwho icontrols i35 ipercent iof ithe imarket i(Carbonate) icombined iwith ithe i40 ipercent iheld iby ithe iacquiring icompany i(Bubbly) idefinitely icould idrive iout ithe iremaining ismall icompetitors iand ibe ia ibarrier ito ifuture ientrants iinto ithis imarket. i iEither ithe iU.S. iDepartment iof iJustice ior ithe iFederal iTrade iCommission icould ifile ifor idivestiture iof ithe iresulting ifirm iif ithese iparties iwere ito imerge. POINTS: i i 1 DIFFICULTY: i i Challenging REFERENCES: i i The iClayton iAct Enforcement iand iExemptions LEARNING iOBJECTIVES: i i LO i- i4 LO i- i5 NATIONAL iSTANDARDS: i i United iStates i- iBUSPROG: iReflectiveReflective i- iBUSPROG: iReflective LOCAL iSTANDARDS: i i United iStates i- iOH i- iDefault iCity i- iAICPA iDecision iModeling KEYWORDS: i i Bloom's: iApplication