Chapter 5

Question 1

police power

Answer 1

basis for gov regulation

capacity of the states to regulate behavior and enforce order within their territory for the betterment of the health, safety, morals, and general welfare of their inhabitants

Question 2

what steps in when competitors create barriers to market entry or collude on prices or production in order to control prices

Answer 2

antitrust laws

Question 3

unfair competition is controlled by who

Answer 3

federal and state gov
statutes and administrative agencies and regulations

Question 4

types of anticompetitive behavior

Answer 4

horizontal restraints
vertical restraints

Question 5

types of horizontal restraints
(those among competitors)

Answer 5

price fixing (Sherman Act)
monopolization (Sherman Act)
mergers among competitors (Clayton Act)

Question 6

types of vertical restraints
(throughout the supply chain)

Answer 6

price discrimination (Robinson-Patman Act)

Exclusive Dealings and Territories (Sherman Act)

mergers along the supply chain (Clayton Act )

resale price maintenance (Sherman Act)

tying ( Clayton Act )

Question 7

Sherman (antitrust) Act

Answer 7

a federal statute prohibiting combinations and contracts in restraint of interstate trade.

Question 8

Clayton Act

Answer 8

a federal law that prohibits anti-competitive mergers, predatory and price discrimination, and other forms of unethical corporate behavior.

Question 9

Robinson-Patman Act

Answer 9

a federal statute that prohibits price discrimination in interstate commerce.

Question 10

How many sections are in sherman act and what are they

Answer 10

2
1. prohibits restraint of trade
2. prohibits monopolization

Question 11

what does the sherman act control

Answer 11

anticompetitive behavior among and between competitors

stop unfair methods of competition

Question 12

what act prohibits competitors from fixing prices and even from exchanging price information

Answer 12

Sherman act

Question 13

Agreements among competitors, as well as “every contract, combination … or conspiracy” to fix prices, violates ____ of the ___

Answer 13

section 1 of Sherman act
1. prohibits restraint of trade

Question 14

Known as horizontal price fixing, any agreement to charge an agreed-upon price or to set maximum or minimum prices between or among competitors are per se violation of

Answer 14

sherman act

Question 15

ability to control prices and exclude competitors

Answer 15

market power

Question 16

boycotts are violation of

Answer 16

Sherman act
intention can be good but its still illegal

Question 17

sherman act does not prohibit what

Answer 17

bigness

Question 18

If the Clayton Act is violated through ownership or control of competing enterprises, a court may order the violating defendant to dispose of such interests by issuing a decree called a

Answer 18

divestiture order

Question 19

divestiture order

Answer 19

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

Question 20

offering one buyer free advertising while not offering it to another as an incentive to buy would be a violation of the

Answer 20

robinson patman act

Question 21

resale price maintenance

Answer 21

attempt by manufacturers to control the prices that retailers can charge for their goods

Question 22

tying

Answer 22

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

Question 23

tying is a violation of what act

Answer 23

sherman act

Question 24

vertical mergers occur between firms that have what relationship

Answer 24

buyer and seller relationship

Question 25

violation of sherman act has punishment of

Answer 25

max $100 million fine for a corp.
1 mill for a normal person- or max 10 years prison or both

Question 26

treble damages

Answer 26

three times the amount of damage

Question 27

parens patriae

Answer 27

theory that the state is suing as the parent of its people.

Question 28

basis for government regulation

Answer 28

police power

Question 29

regulation is passed when …

Answer 29

the free enterprise system fails to control abuses, as when companies engage in unfair methods of competition

Question 30

what act focuses on horizontal anticompetitive behavior such as price fixing, boycotts, refusal to deals, and monopolization through means other than fair competition

Answer 30

Sherman act

Question 31

what act prohibits mergers or acquisition of the assets of another corporation when this conduct would tend to lessen the competition or create a monopoly

Answer 31

Clayton act