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11.E: Assessment Questions

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    1. All of the following are forms of restraint of trade that company might use to reduce competition except:
      1. Monopolies.
      2. Oversupply.
      3. Price-fixing.
      4. Mergers.


    1. What is a Business Trust?
    2. Distinguish between naked restraint and ancillary restraint.

    Naked restraint occurs as contracts promote a general restraint of competition. If the restraint was created with a goal of long-term impact without boundaries, it was considered to be a naked restraint. Ancillary restraint occurs as the restriction is limited in time and geography. With ancillary restraint, the restraint would be short-term and limited in scope. The courts tended to frown upon naked restraint, but were less consistent with ancillary restraint.

    1. What was the first antitrust law enacted?.
      1. The Clayton Act.
      2. The Federal Trade Commission Act.
      3. The Antitrust Act.
      4. The Sherman Act.
    2. What was the original purpose of antitrust legislation?

    The original purpose of antitrust legislation, i.e., to foster competition that results in lower prices, more products, and more equal distribution of wealth between producers, remains relevant today.

    1. What recourse does the FTC have if an individual or company engages in an unfair trade practice?
      1. Consent order.
      2. Administrative complaint.
      3. Litigation.
      4. All of the above.
    2. Each state has its own Antitrust law.
      1. True.
      2. False.


    1. Which of the following is not prohibited by the Sherman Act?
      1. Temporary limited restraints.
      2. Temporary restraints.
      3. Naked restraints.
      4. Ancillary restraints.
    2. Which of the following are possible penalties for violation of the Sherman Act?
      1. Up to \(\$100\) million for corporations and individuals.
      2. Up to \(\$100\) million for individuals.
      3. Up to \(\$100\) millions for corporations.
      4. None of these are correct.


    1. Which of the following are considered illegal by the Clayton Act?
      1. Price discrimination.
      2. Exclusive dealing contracts.
      3. Corporate mergers.
      4. All of the above.
    2. The following are exempt from antitrust laws:
      1. Small businesses.
      2. Coops.
      3. Labor unions.
      4. Agriculture groups even if they engage in restraint of trade.


    1. When was the Federal Trade Commission established?
      1. 1912.
      2. 1914.
      3. 1916.
      4. 1920.
    2. The following are bureaus of the Federal Trade Commission except:
      1. Bureau of Unfair Trade Practices.
      2. Bureau of Consumer Protection.
      3. Bureau of Competition.
      4. Bureau Economics.


    1. What is the mission of the Bureau of Competition?
    2. Explain the Wheeler-Lea Act.

    The FTC did not formally have a consumer protection mission until the passage of the Wheeler-Lea Act in 1938. This act gave the FTC the power to combat false advertising for any foods, drugs, medical devices, or cosmetics. In addition to the Wheeler-Lea Act, subsequent amendments to the FTC Act, as well as judicial respect toward the agency, broadened the power and jurisdiction of the FTC.

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