Chapter 25

Question 1

The high-water mark of antitrust enforcement was marked by the ____ case.

Answer 1

ALCOA

Question 2

The Clayton Act prohibited

Answer 2

interlocking directorates

Question 3

The “rule of reason” originated in the

Answer 3

Standard Oil case of 1911.

Question 4

The antitrust case that ended the use of the “rule of reason” by the Supreme Court was the ________ case.

Answer 4

ALCOA

Question 5

The conventional merger is the ____ merger.

Answer 5

horizontal

Question 6

Which statement is true?

Answer 6

Since 1980, there has been a marked increase in the number of large mergers.

Question 7

A merger between Bank of America and Citibank would be a ____ merger.

Answer 7

horizontil

Question 8

A key passage of the ____ Act stated that “every contract, combination in form of trust or otherwise, in restraint of commerce among the several states, or with foreign nations, is hereby declared illegal.”

Answer 8

Sherman

Question 9

The trusts won only the ____ case.

Answer 9

steel

Question 10

The Supreme Court’s “rule of reason”

Answer 10

was applied from 1911 to 1945.

Question 11

The Clayton Act prohibited each of the following except

Answer 11

trusts

Question 12

There has been an unmistakable steady trend toward bigness in business since

Answer 12

the late-1990s.

Question 13

The most common corporate crime is ______________.

Answer 13

taking advantage of insider knowledge for ill-gained profits

Question 14

The Microsoft case ended with ______________.

Answer 14

a compromise settlement between Microsoft and the federal government

Question 15

A merger between Hertz Rent-a-Car and Budget Rent-a Car would be a ______ merger.

Answer 15

horizontal

Question 16

In the 1960s, about 80% of the mergers were of the __________ variety.

Answer 16

conglomerate

Question 17

The decision to bring suit in an antitrust case is usually made by

Answer 17

the Department of Justice.

Question 18

Each of the following companies lost major cases heard by the Supreme Court except

Answer 18

DuPont

Question 19

In the ALCOA Case of 1945, the courts held that:

Answer 19

the mere possession of monopoly power is a violation of the antitrust laws.

Question 20

In the 1980s

Answer 20

the airlines and trucking were subjected to less regulation.

Question 21

In general we could say that the decade of the 1980s was a time of

Answer 21

less regulation.

Question 22

A merger of a firm and its supplier is called

Answer 22

a vertical merger.

Question 23

A horizontal merger takes place when

Answer 23

a firm acquires a competitor.

Question 24

A vertical merger takes place when

Answer 24

a firm integrates its production backward toward its source of supply or forward in its marketing chain.

Question 25

A conglomerate merger takes place when

Answer 25

a firm buys another firm unrelated to the original firm’s business.