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Economics - Chapter 25 > Chapter 25 > Flashcards

Chapter 25 Flashcards

1
Q

The high water mark of antitrust enforcement was marked by the ______________________

  • ALCOA
  • US Steel
  • American Tobacco
  • IBM
A

ALCOA

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2
Q

The Clayton Act prohibited

  • interlocking directorates
  • all forms of monopoly
  • foreign control of US corporations
  • false and deceptive advertising
A

interlocking directorates

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3
Q

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
A

Standard Oil case of 1911

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4
Q

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
A

ALCOA

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5
Q

The conventional merger is the ____________________-merger

  • horizontal
  • vertical
  • conglomerate
  • diversifying
A

Horizontal

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6
Q

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
A

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

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7
Q

A merger between Bank of America and Citibank would be a ____________________ merger

  • horizontal
  • vertical
  • conglomerate
  • diversitying
A

horizontal

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8
Q

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
A

Sherman

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9
Q

The trusts won only the ____________case.

  • cotton
  • steel
  • tobacco
  • oil
A

steel

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10
Q

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
A

was applied from 1911 to 1945

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11
Q

The Clayton Act prohibited each of the following except

  • price discrimination
  • interlocking stockholding
  • interlocking direcctorates
  • trusts
A

trusts

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12
Q

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

  • the Civil War
  • 1911
  • the mid 1930’s
  • the late 1990’s
A

the late 1990’s

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13
Q

The most common corporate crime is _________________________

  • taking advantage of insider knowledge for ill gained profits
  • embezzlement
  • overstating costs
  • overcharging customers
A

taking advantage of insider knowledge for ill-gained profits

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14
Q

The Microsoft case ended with __________________________

  1. a clear cut win for the federal government
  2. a compromise settlement between Microsoft and the federal government
  3. a guilty ple by Microsoft but no breakup of the company
  4. an abandonment of the case by the federal government
A

a compromise settlement between Microsoft and the federal government

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15
Q

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

  • horizontal
  • vertical
  • conglomerate
  • diversitying
A

horizontal

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16
Q

In the 1960’s about 80% of the mergers were of the _______________________ variety.

  1. horizontal
  2. vertical
  3. conglomerate
  4. conventional
A

conglomerate

17
Q

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
A

The Department of Justice

18
Q

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

  • ALCOA
  • DuPont
  • the Standard Oil Trust
  • the American Tobacco Trust
A

DuPont

19
Q

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
A

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

20
Q

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
A

the airlines and trucking were subjected to less regulation

21
Q

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
A

less regulation

22
Q

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

a vertical merger

23
Q

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

a firm acquires a competitor

24
Q

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

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

25
Q

A conglomerate merger takes place when

  • a firm acquires a competitor
  • similar firms agree to compete
  • a firm integrates its production backward towards its source of supply its marketing chain
  • a firm buys another firm unrelated to the original’s firm’s buisness
A

a firm buys another firm unrelated to the orignal firm’s business

Economics - Chapter 25 (1 decks)

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