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Flashcards in CH 5 Test 1 Deck (56)
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1

Clayton Act

a federal law that prohibits price discrimination.

2

divestiture order

a court order to dispose of interests that could lead to a monopoly.

3

market power

the ability to control price and exclude competitors.

4

price discrimination

the charging practice by a seller of different prices to different buyers for commodities of similar grade and quality, resulting in reduced competition or a tendency to create a monopoly.

5

Robinson-Patman Act

a federal statute designed to eliminate price discrimination in interstate commerce.

6

Sherman Antitrust Act

a federal statute prohibiting combinations and contracts in restraint of interstate trade, now generally inapplicable to labor union activity.

7

treble damages

three times the damages actually sustained.

8

tying

the anticompetitive practice of requiring buyers to purchase one product in order to get another.

9

TRUE/FALSE

The government can regulate not just businesses, but also business competition and prices.

True

10

TRUE/FALSE

State governments may regulate business in all of its aspects, even if such regulation imposes a burden on interstate commerce.

False

11

TRUE/FALSE

The federal government may regulate any area of business to advance the nation’s economic needs.

True

12

TRUE/FALSE

Governments may regulate prices but not credit terms.

False

13

TRUE/FALSE

Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition.

True

14

TRUE/FALSE

The Federal Trade Commission administers the law prohibiting unfair methods of competition.

True

15

TRUE/FALSE

An agreement between real estate brokers to never charge a commission less than 6% is not an example of price fixing.

False

16

TRUE/FALSE

The Sherman Act applies only to buying and selling activities, not manufacturing and production activities.

False

17

TRUE/FALSE

Having a large percentage of the market is not necessarily a monopoly.

True

18

TRUE/FALSE

Boycotts are always illegal, even when done with good intentions.

True

19

TRUE/FALSE

Under the Sherman Act competitors are permitted to agree not to deal with certain buyers.

False

20

TRUE/FALSE

A divestiture order is a decree ordering a defendant to dispose of excessive ownership or control of interests in competing enterprises.

True

21

TRUE/FALSE

When large-size enterprises plan to merge, they must give written notice to the Interstate Commerce Commission.

False

22

TRUE/FALSE

The Clayton Act prohibits price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition.

True

23

TRUE/FALSE

A manufacturer with distributors in New York City may give its newer distributors free advertising and other services to help them compete with the distributors who have been doing business for a number of years and have become firmly established.

False

24

TRUE/FALSE

A state may prohibit a seller from selling below cost if the purpose is to harm competitors.

True

25

TRUE/FALSE

A price reduction to one customer is lawful when it is made because of the deteriorated condition of the goods sold to that customer.

True

26

TRUE/FALSE

Price discrimination is not permitted even when it can be justified on the basis of a difference in grade, quality, or quantity.

False

27

TRUE/FALSE

The Robinson-Patman Act guarantees a seller the right to refuse to deal with anyone for any reason or purpose.

False

28

TRUE/FALSE

A manufacturer having a restriction on territories in the form of a sole outlet is a per se violation

False

29

TRUE/FALSE

A “suggested retail price” is not a violation of the antitrust laws.

True

30

TRUE/FALSE

Requiring buyers to purchase one product in order to get another is acceptable practice and not a violation of the Sherman Act.

False