Business Law Final Exam

Question 1

What is the Federal Trade Commission Act?

Answer 1

Unfair methods of competition. Regulates the words “sale” and “going out of business”

Question 2

What is the Sherman Act?

Answer 2

Restraints of trade and monopolization

Question 3

What is the Clayton Act?

Answer 3

Deals with mergers

Question 4

What is Per Se?

Answer 4

Courts look at the benefits that might outweigh its anticompetitive effects

Question 5

What is the Rule of Reason?

Answer 5

Courts weigh the anticompetitive effects against the pro competitive effects to determine whether the agreement is a reason to trade

Question 6

Vertical Restraints

Answer 6

A company at one stage of production acquires a company at a HIGHER or LOWER stage of production

Question 7

Horizontal Restraints

Answer 7

Between firms that compete with each other in the SAME market

Question 8

Conglomerate

Answer 8

Between firms that DO NOT compete with each other because they are in different markets

Question 9

What is negligence?

Answer 9

Based off fault, Causation & Duty Breached

Question 10

What is an economic expense?

Answer 10

Out of pocket expense, Lost Wages, Medical Expenses

Question 11

What are non-economic expenses?

Answer 11

Pain & Suffering. Up to $750,000 in TN

Question 12

Workers Comp. is what?

Answer 12

Wage replacement, medical expense, injury must arise out of the employment. Incurred on the clock. In TN you must have both “arise” and “incurred”

Question 13

What is the Civil Rights Act, Title VII?

Answer 13

Act protecting people based off their race, sex, religion……

Question 14

American Disabilities Act (ADA) is what?

Answer 14

Protects discrimination against people with a disability

Question 15

Age Discrimination Employment Act (ADEA)

Answer 15

Protects people 40 years and older. If hiring a 45 year old and a 55 year ld, the ADEA will protect the 55 not 45.

Question 16

What are the three kinds of discrimination?

Answer 16

Treatment, Impact, and Harassment

Question 17

What is BFOQ?

Answer 17

Bona Fide Occupational Qualifications. Only age and gender NOT race.

Question 18

1933 Securities Act does what?

Answer 18

Applies to initial offerings (when stock is offered to the public). Securities have to be registered unless you are selling it to a select group of people

Question 19

What is the 1934 Securities Exchange Act?

Answer 19

Applies to secondary trading (after it’s been sold the first time)

Question 20

In Section 16b, an Insider is what?

Answer 20

An officer, director, or somebody that owns 10% in stock. Engages in two transactions, one of which is a purchase and other is a sale in 6 months

Question 21

Rule 10b-5 is what?

Answer 21

One transaction needed to breach duty, non public information is used. You know the stock will go up, you buy, then sell it once the price goes up. Personal gain!

Question 22

Torte law has three conducts. What are they?

Answer 22

Intent, Reckless, and Negligence

Question 23

What is Intent Conduct?

Answer 23

Done on purpose

ex. Ramming your car into your ex’s house

Question 24

What is Reckless Conduct?

Answer 24

Don’t intend anybody to be hurt but the certainty that somebody will get hurt is greater. ex. Texting while driving

Question 25

What is Negligence Conduct?

Answer 25

Was duty breached? Did that cause an injury? Duty - Breach - Causation - Injury

Question 26

What is "breach"?

Answer 26

Actual - But - For: Because you sent this text, you knew the accident could happen Proximate - Foreseeability: Could you see this accident happen because of an action

Question 27

What is strict liability?

Answer 27

Workers Comp, Harassment, Section 16b

Question 28

What are Punative Damages?

Answer 28

Only intent and maybe reckless. Punish defendant. Limited to $750,000 in TN

Question 29

What is the goal of the Federal Trade Commission?

Answer 29

Maximize the consumers position by regulating commission and the relationships with the business and their merchant

Question 30

What is deception?

Answer 30

A representation (express or implied) material, likely to mislead a reasonable consumer

Question 31

What is consent order?

Answer 31

We think you are doing something wrong, if you stop/fix it they they will let you go

Question 32

What is a Cease and Desist Order?

Answer 32

Order from a judge to tell you to stop doing something

Question 33

What is a Multiple Product Order?

Answer 33

A line of products but only one product was wrong, this would jump from product to product.

Question 34

Counter Advertising and Corrective Advertising is what?

Answer 34

Ads that correct a misconception from a previous ad

Question 35

What is horizontal price fixing?

Answer 35

When two companies come together and determine a price that both will charge their customers

Question 36

Is the Per Se Rule horizontal or vertical?

Answer 36

Horizontal | the Sun rises on the HORIZON

Question 37

Is the Rule of Reason horizontal or vertical?

Answer 37

Vertical

Question 38

What is Intra-brand Competition?

Answer 38

When two franchises of a single business are in competition. | ex. McDonalds

Question 39

What is Inter-brand Competition?

Answer 39

competition between dealers or suppliers who are selling different brands of the same or equivalent goods ex. Sam's and Cosco

Question 40

Having monopoly power is not a violation of the __________ ___. However, monopolization is.

Answer 40

Sherman Act