Chapter 25 Flashcards
The high water mark of antitrust enforcement was marked by the ______________________
- ALCOA
- US Steel
- American Tobacco
- IBM
ALCOA
The Clayton Act prohibited
- interlocking directorates
- all forms of monopoly
- foreign control of US corporations
- false and deceptive advertising
interlocking directorates
The “rule of reason” orginiated in the
- Standard Oil case of 1911
- US Steel case of 1920
- ALCOA case of 1945
- XEROX case of 1973
Standard Oil case of 1911
The antitrust case that ended the use of the “rule of reason” by the Supreme Court was the _____________case.
- American Tobacco
- ALCOA
- US Steel
- IBM
ALCOA
The conventional merger is the ____________________-merger
- horizontal
- vertical
- conglomerate
- diversifying
Horizontal
Which statement is true?
- Virtually all economists agree that US industry is becoming concentrated
- The 200 largest firms produce over 90% of our manufactured goods
- Since 1980 there has been a marked increase in the number or large mergers
- None of these statements is true
Since 1980 there has been a marked increase in the large number of large mergers
A merger between Bank of America and Citibank would be a ____________________ merger
- horizontal
- vertical
- conglomerate
- diversitying
horizontal
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 wtih foreign nations, is hereby declared illegal”
- Clayton
- FTC
- DuPont
- Sherman
Sherman
The trusts won only the ____________case.
- cotton
- steel
- tobacco
- oil
steel
The Supreme Court’s rule of reason
- has been applied since the time of the Civil War
- was applied from 1911 to 1945
- has been applied since 1945
- has been applied since 1970
was applied from 1911 to 1945
The Clayton Act prohibited each of the following except
- price discrimination
- interlocking stockholding
- interlocking direcctorates
- trusts
trusts
There has been an unmistakable steady trend toward bigness in business since
- the Civil War
- 1911
- the mid 1930’s
- the late 1990’s
the late 1990’s
The most common corporate crime is _________________________
- taking advantage of insider knowledge for ill gained profits
- embezzlement
- overstating costs
- overcharging customers
taking advantage of insider knowledge for ill-gained profits
The Microsoft case ended with __________________________
- a clear cut win for the federal government
- a compromise settlement between Microsoft and the federal government
- a guilty ple by Microsoft but no breakup of the company
- an abandonment of the case by the federal government
a compromise settlement between Microsoft and the federal government
A merger between Hertz Rent-a-Car and Budget Rent A Car would be _____________________________
- horizontal
- vertical
- conglomerate
- diversitying
horizontal
In the 1960’s about 80% of the mergers were of the _______________________ variety.
- horizontal
- vertical
- conglomerate
- conventional
conglomerate
The deciision to bring suit in an antitrust case is usually made by
- the injured party
- the Supreme Court or a lower federal court
- the Department of Commerce
- The Department of Justice
The Department of Justice
Each of the following companies lost major cases by the Supreme Court except
- ALCOA
- DuPont
- the Standard Oil Trust
- the American Tobacco Trust
DuPont
In the ALCOA Case of 1945 the courts held that
- firms that sell more than half of their output overseas are exempt from antitrust legislation
- retail and wholesale firms are exempt from antitrust legislation
- only contracts and combinations that unreasonably restrain trade are in violation of the Sherman Act
- the mere possession of monopoly power is a violation of the antitrust laws
the mere possession of monopoly power is a violation of the antitrust laws
In the 1980’s
- the airlines and trucking were subjected to more regulation
- the airlines and trucking were subjected to less regulation
- the airlines were subjected to more regulation and trucking to less
- trucking was subjected to more regulation and the airlines to less
the airlines and trucking were subjected to less regulation
In general we could say that the decade of the 1980’s was a time of
- more regulation
- less regulation
- little change in degree of regulation
less regulation
A merger of a firm and its supplier is called
- a vertical merger
- a horizontal merger
- a conglomerate merger
- a direct merger
- an indirect merger
a vertical merger
A horizontal merger takes place when
- a firm acquires a competitor
- similar firms agree to compete
- firms in different industries merge
- a firm diversifies by merging with a foreign firm
a firm acquires a competitor
A vertical merger takes place when
- a firm acquires a conglomerate
- a firm acquires a competitor
- a firm integrates its production backward toward its source of supply or forward in its marketing chain
- firms merge in order to diversity
a firm integrates its production backward toward its source of supply or forward in its marketing chain
