Antitrust Law Quiz

Description: This quiz covers the basics of antitrust law, including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act.
Number of Questions: 15
Created by:
Tags: antitrust law sherman act clayton act federal trade commission act
Attempted 0/15 Correct 0 Score 0

Which of the following is not a type of antitrust law?

  1. Sherman Act

  2. Clayton Act

  3. Federal Trade Commission Act

  4. Robinson-Patman Act


Correct Option: D
Explanation:

The Robinson-Patman Act is a law that prohibits price discrimination, not a type of antitrust law.

What is the purpose of the Sherman Act?

  1. To prevent monopolies

  2. To regulate trade between states

  3. To protect consumers from unfair business practices

  4. All of the above


Correct Option: D
Explanation:

The Sherman Act is a federal antitrust law that prohibits monopolies, regulates trade between states, and protects consumers from unfair business practices.

What is the difference between a monopoly and a cartel?

  1. A monopoly is a single company that controls a large share of a market, while a cartel is a group of companies that agree to fix prices or output.

  2. A monopoly is a single company that controls a large share of a market, while a cartel is a group of companies that agree to divide up a market.

  3. A monopoly is a single company that controls a large share of a market, while a cartel is a group of companies that agree to share profits.

  4. A monopoly is a single company that controls a large share of a market, while a cartel is a group of companies that agree to merge.


Correct Option: A
Explanation:

A monopoly is a single company that controls a large share of a market, while a cartel is a group of companies that agree to fix prices or output.

What is the Clayton Act?

  1. A law that prohibits price discrimination

  2. A law that prohibits mergers that may substantially lessen competition

  3. A law that creates the Federal Trade Commission

  4. All of the above


Correct Option: D
Explanation:

The Clayton Act is a federal antitrust law that prohibits price discrimination, prohibits mergers that may substantially lessen competition, and creates the Federal Trade Commission.

What is the Federal Trade Commission Act?

  1. A law that creates the Federal Trade Commission

  2. A law that prohibits unfair methods of competition

  3. A law that prohibits deceptive advertising

  4. All of the above


Correct Option: D
Explanation:

The Federal Trade Commission Act is a federal law that creates the Federal Trade Commission, prohibits unfair methods of competition, and prohibits deceptive advertising.

What is the role of the Federal Trade Commission?

  1. To enforce antitrust laws

  2. To regulate trade between states

  3. To protect consumers from unfair business practices

  4. All of the above


Correct Option: D
Explanation:

The Federal Trade Commission is an independent agency of the United States government that enforces antitrust laws, regulates trade between states, and protects consumers from unfair business practices.

What is the difference between a horizontal merger and a vertical merger?

  1. A horizontal merger is a merger between two companies that compete in the same market, while a vertical merger is a merger between two companies that are in different stages of the production process.

  2. A horizontal merger is a merger between two companies that are in the same industry, while a vertical merger is a merger between two companies that are in different industries.

  3. A horizontal merger is a merger between two companies that are in the same geographic market, while a vertical merger is a merger between two companies that are in different geographic markets.

  4. A horizontal merger is a merger between two companies that are in the same country, while a vertical merger is a merger between two companies that are in different countries.


Correct Option: A
Explanation:

A horizontal merger is a merger between two companies that compete in the same market, while a vertical merger is a merger between two companies that are in different stages of the production process.

What is the Herfindahl-Hirschman Index (HHI)?

  1. A measure of market concentration

  2. A measure of market power

  3. A measure of market share

  4. A measure of market efficiency


Correct Option: A
Explanation:

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration that is used to determine whether a merger may substantially lessen competition.

What is the rule of reason?

  1. A rule that prohibits all mergers that may substantially lessen competition

  2. A rule that prohibits all mergers that create a monopoly

  3. A rule that allows mergers that are likely to benefit consumers

  4. A rule that allows mergers that are likely to benefit the economy


Correct Option: C
Explanation:

The rule of reason is a rule that allows mergers that are likely to benefit consumers, even if they may substantially lessen competition.

What is the Clayton Act's Section 7?

  1. A provision that prohibits mergers that may substantially lessen competition

  2. A provision that prohibits price discrimination

  3. A provision that creates the Federal Trade Commission

  4. A provision that prohibits deceptive advertising


Correct Option: A
Explanation:

Clayton Act's Section 7 is a provision that prohibits mergers that may substantially lessen competition.

What is the Federal Trade Commission's Section 5?

  1. A provision that prohibits unfair methods of competition

  2. A provision that prohibits deceptive advertising

  3. A provision that creates the Federal Trade Commission

  4. A provision that prohibits price discrimination


Correct Option: A
Explanation:

The Federal Trade Commission's Section 5 is a provision that prohibits unfair methods of competition.

What is the Sherman Act's Section 1?

  1. A provision that prohibits monopolies

  2. A provision that prohibits price fixing

  3. A provision that prohibits tying arrangements

  4. A provision that prohibits exclusive dealing arrangements


Correct Option: A
Explanation:

The Sherman Act's Section 1 is a provision that prohibits monopolies.

What is the Sherman Act's Section 2?

  1. A provision that prohibits price fixing

  2. A provision that prohibits tying arrangements

  3. A provision that prohibits exclusive dealing arrangements

  4. A provision that prohibits predatory pricing


Correct Option: A
Explanation:

The Sherman Act's Section 2 is a provision that prohibits price fixing.

What is the Clayton Act's Section 2?

  1. A provision that prohibits price discrimination

  2. A provision that prohibits tying arrangements

  3. A provision that prohibits exclusive dealing arrangements

  4. A provision that prohibits predatory pricing


Correct Option: A
Explanation:

The Clayton Act's Section 2 is a provision that prohibits price discrimination.

What is the Clayton Act's Section 3?

  1. A provision that prohibits tying arrangements

  2. A provision that prohibits exclusive dealing arrangements

  3. A provision that prohibits predatory pricing

  4. A provision that prohibits mergers that may substantially lessen competition


Correct Option: A
Explanation:

The Clayton Act's Section 3 is a provision that prohibits tying arrangements.

- Hide questions