Chapter 25

Question 1

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

Answer 1

A. ALCOA

Question 2

The Clayton Act prohibited

Answer 2

A. Interlocking directorates

Question 3

The “rule of reason” originated in the

Answer 3

A. Standard Oil case of 1991

Question 4

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

Answer 4

B. ALCOA

Question 5

The conventional merger is the _______ merger.

Answer 5

A. Horizontal

Question 6

Which statement is true?

a. Virtuall all economists agree that the US industry is becoming increasingly concentrated
b. The 200 largest firms produce over 90% of our manufactured goods.
c. Since 1980, there has been a marked increase in the number of large mergers.
d. None of these is true

Answer 6

C. 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

A. horizontal

Question 8

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

Answer 8

D. Sherman

Question 9

The trust won only the _____ case.

Answer 9

B. Steel

Question 10

The Supreme Court’s “rule of reason”

Answer 10

B. was applied from 1911 to 1945

Question 11

The Clayton Act prohibited each of the following except

Answer 11

D. trusts

Question 12

There has been an unmistakable steady trend towards bigness in the business since

Answer 12

D. the late-1990’s

Question 13

The most common corporate crime is ________.

Answer 13

A. taking advantage of inside knowledge for ill-gained profits

Question 14

The microsoft case ended with ________.

Answer 14

B. 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

A. horizontal

Question 16

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

Answer 16

C. conglomerate

Question 17

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

Answer 17

D. the Department of Justice

Question 18

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

Answer 18

B. DuPont

Question 19

In the ALCOA case of 1945, the courts held that

Answer 19

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

Question 20

In the 1980’s

Answer 20

B. the airlines and trucking were subjected to less regulations

Question 21

In general we could say that the decade of the 1908’s was a time of

Answer 21

B. less regulation

Question 22

A merger of a firm and its supplier is called

Answer 22

A. a vertical merger

Question 23

A horizontal merger takes place when

Answer 23

A. a firm acquires a competitor

Question 24

A vertical merger takes place when

Answer 24

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

Question 25

A conglomerate merger takes place when

Answer 25

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