Q&A Hero

Q: Under the Fair Labor Standards Act, employers must now pay double time for any work beyond 40 hours per week.

Q: Workers' compensation provides a form of no-fault protection in the workplace.

Q: The unemployment insurance program in the United States is financed through a payroll tax paid by employers.

Q: A business that hires an independent contractor generally is required to comply with a wide range of employment and labor law standards.

Q: Independent contractors are protected by the Fair Labor Standards Act, that requires, among other things, the payment of the federal minimum wage and overtime pay.

Q: Truth is a complete defense in defamation cases.

Q: Employers will be held liable under respondeat superior reasoning for harm to third parties caused by the intentional or negligent acts of their employees when those acts occur within the scope of employment.

Q: One of the major objectives of the Fair Labor Standards Act is the establishment of a minimum wage that provides at least the foundation for a modest standard of living for employees.

Q: Degree of control is the dominant test in determining whether a worker is an employee or independent contractor.

Q: List the potential benefits and hazards of mergers.

Q: Explain the differences among horizontal, vertical, and conglomerate mergers.

Q: What is premerger notification?

Q: What are the remedies for mergers determined to be anticompetitive?

Q: What is a monopoly? How is an unlawful monopoly determined?

Q: Which of the following is employed to measure market concentration? A. The Herfindahl Hirschman Index B. The Atkinson Index C. The Gini Index D. The Ogive Index

Q: Which of the following statements about the HerfindahlHirschman Index (HHI) is true? A. The smaller the HHI, the more likely the government will be concerned about the merger. B. The larger the increase in the HHI, the less concentrated the market. C. The greater the increase in the HHI, the less likely the government will be concerned about the merger. D. The larger the HHI, the more concentrated the market.

Q: The _____ doctrine permits a merger to preserve the assets of a firm that would otherwise be lost to the market. A. indoor management B. reciprocity C. failing company D. price squeeze

Q: A _____ merger typically involves an alliance between a supplier and a purchaser. A) congeneric B) conglomerate C) horizontal D) vertical

Q: Which of the following is true of the Sherman Act? A. It applies to the conduct of American business abroad when that business has a direct effect on American commerce. B. It applies only to the conduct of all businesses based in the United States. C. If a business was conducted entirely abroad, it is outside the purview of the Sherman Act. D. If an American firm enters into an agreement with another nation, it cannot be sued for violations under the Sherman Act.

Q: Which of the following acts is applicable to acquisitions combining domestic and foreign firms and is potentially applicable to acquisitions not involving American firms if the effect would harm competition in the American market? A. The Sherman Act B. The Clayton Act C. The SarbanesOxley Act D. The RobinsonPatman Act

Q: A merger of two wine producers in the same geographic market would be an example of a _____ merger. A. congeneric B. vertical C. conglomerate D. horizontal

Q: A car manufacturer acquiring a tire manufacturing company would be an example of a _____ merger. A. congeneric B. vertical C. horizontal D. conglomerate

Q: Which of the following categories of mergers involves firms dealing in unrelated products? A. Congeneric B. Vertical C. Horizontal D. Conglomerate

Q: An athletic footwear manufacturing company acquiring a mineral water manufacturing company would be an example of a _____ merger. A. congeneric B. vertical C. horizontal D. conglomerate

Q: Feety Shoes, a footwear manufacturing company, acquires Skeez Leathers, a leather manufacturing company. This would be an example of a _____ merger. A. congeneric B. vertical C. horizontal D. conglomerate

Q: The ability of a seller to profitably maintain prices above competitive levels for a significant period of time is called _____. A. price fixing B. market foreclosure C. market power D. predatory pricing

Q: Which of the following acts offers the primary legislative oversight: "That no person engaged in commerce shall acquire the whole or any part of the stock or the assets of another person engaged also in commerce where the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly"? A. The Wagner Act B. The SarbanesOxley Act C. The Clayton Act D. The RobinsonPatman Act

Q: A _____ merger involves two or more firms at different levels of the same channel of distribution. A. horizontal B. vertical C. conglomerate D. congeneric

Q: Which of the following is a disadvantage of mergers? A. Mergers hinder economies of scale. B. Mergers may contribute to management inefficiencies. C. Mergers may lead to higher prices. D. Growth by merger is often more expensive than internal growth.

Q: Which of the following is a hazard of mergers? A. Mergers do not offer tax advantages. B. Mergers lead to too much power being concentrated in too few hands. C. Mergers increase competition in the market. D. Growth by merger is always more expensive than internal growth.

Q: Which of the following is a defense to monopolization? A. Price fixing B. Price discrimination C. Natural Monopoly D. Coercive conduct

Q: A few firms sharing monopoly power constitute a(n) _____. A. monopsony B. monopolistic market C. oligopoly D. perfectly competitive market

Q: Conditions where the market will support only one firm or where large economies of scale exist are termed _____. A. oligopoly B. oligopsony C. monopsony D. natural monopoly

Q: Which act forbids attempts to monopolize as well as monopoly itself? A. The Sherman Act B. The SarbanesOxley Act C. The RobinsonPatman Act D. The Wagner Act

Q: Which of the following is an advantage of mergers? A. Mergers may improve credit access. B. Mergers may lead to lower market concentration. C. Mergers tend to reduce barriers to entry. D. Mergers help shape political affairs.

Q: Which of the following is a potential virtue of mergers? A. A single merger can trigger a merger movement among industry competitors. B. Mergers may permit stronger competition with previously larger rivals. C. Mergers can significantly shape political affairs. D. Mergers concentrate too much power in too few hands.

Q: In 2000, Microsoft was deemed to have violated federal antitrust laws by using _____. A. price discrimination B. monopoly power C. predatory pricing D. conglomerate mergers

Q: Which of the following statements is true of antitrust law? A. Antitrust laws facilitate market foreclosure by raising barriers to entry. B. Antitrust laws are designed to curb competition that poses threats to market dominant companies. C. Antitrust law does not apply in the event of a conglomerate merger. D. Antitrust law does not punish efficient companies who legitimately earn and maintain large market shares.

Q: A(n) _____ is a situation in which one firm holds the power to control prices and/or exclude competition in a particular market. A. oligopsony B. oligopoly C. monopoly D. perfect competition

Q: Which of the following is a part of the general legal test for monopolization? A. Monopoly as a consequence of a superior product B. Growth or development as a consequence of historic accident C. The existence of a natural monopoly in that industry D. The willful acquisition or maintenance of monopoly power

Q: Which of the following data is generally used by the federal government in combination with evidence of actual behavior to identify anticompetitive situations? A. Profit margins B. Patent information C. Market concentration D. Credit access

Q: Which of the following acts forbids monopolies? A. The Sherman Act B. The Wagner Act C. The MagnusonMoss Act D. The SarbanesOxley Act

Q: United States antitrust laws cannot be applied to foreign corporations doing business in the United States.

Q: The Sherman Act applies to the conduct of American business abroad when that business has a direct effect on American commerce.

Q: The smaller the HerfindahlHirschman Index (HHI), the more concentrated the market.

Q: The failing company doctrine permits a merger to preserve the assets of a firm that would otherwise be lost to the market.

Q: The primary threat to competition arising from vertical mergers is labeled market foreclosure.

Q: Growth by merger is often more expensive than internal growth.

Q: A merger involves the union of two or more enterprises wherein the property of all is transferred to the one remaining firm.

Q: The conglomerate category includes all mergers that are neither horizontal nor vertical.

Q: Private parties commonly use the antitrust laws to sue for treble damages when they believe a merger has harmed them unlawfully.

Q: The greater the HerfindahlHirschman Index (HHI), the more likely the government will be concerned about the merger.

Q: High market concentration often promotes competition.

Q: Market share alone will lead to antitrust action.

Q: Market share, by itself, can establish monopoly power.

Q: A monopoly may be earned or thrust upon a monopolist.

Q: Mergers may produce significant economies of scale.

Q: The Sherman Act prohibits attempts to monopolize as well as monopoly itself.

Q: A situation in which a firm holds the power to control prices and/or exclude competition in a particular market is called an oligopoly.

Q: Identify and explain the elements a plaintiff must prove to establish an illegal tying arrangement.

Q: What is price discrimination? What are the defenses to a Robinson-Patman charge?

Q: In 2000, Microsoft was charged with violating federal antitrust laws by maintaining market dominance through anticompetitive means.

Q: Explain the difference between per se antitrust violations and those analyzed under the rule of reason.

Q: How is the presence of an unlawful price-fixing arrangement established?

Q: 49. How does the law address patent/antitrust conflicts?

Q: Define resale price maintenance.

Q: Which of the following involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices, where the effect may substantially lessen competition or tend to create a monopoly? A. Price discrimination B. Predatory pricing C. Resale price maintenance D. Conscious parallelism

Q: Predatory pricing: A. involves pricing below cost until a competitor drops out and then raising those prices to supracompetitive levels. B. involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices. C. prevents distributors from selling to some classes of customers. D. imposes nonprice restraints including where and to whom products may be resold.

Q: Shaun opens a pastry shop right across the street from his competitor, Jason's pastry shop. To eliminate Jason's competition, Shaun radically lowers prices of his pastries attracting customers to his pastry shop and eventually driving Jason out of business. Which of the following antitrust violations could Shaun be charged with? A. Predatory pricing B. Price discrimination C. Psychological pricing D. Dual pricing

Q: Explain the changing goals of antitrust law.

Q: How does the law address patent/antitrust conflicts?

Q: Which of the following occurs through an exclusive dealing contract? A. The sellers in a market compete to drive prices down and quality up. B. A seller colludes with another seller to jointly restrict their output. C. The sellers in a market agree to divide the market into exclusive territories to reduce competition. D. A buyer commits to deal only with a specific seller.

Q: A(n) _____ is one in which a seller agrees to supply all of a buyer's needs, or a buyer agrees to purchase all of a seller's output, or both. A. exclusive dealing contract B. requirements contract C. tying arrangement D. free rider

Q: By its nature a(n) _____ results in market foreclosure; that is, competitors are denied a source of supply or a market for sale. A. price differential B. exclusive deal C. tying arrangement D. free rider

Q: Manufacturers and distributors often seek to specify the price at which their customers may resell their products, a policy which is referred to as _____. A. resale price maintenance B. horizontal price fixing C. price discrimination D. predatory pricing

Q: Which of the following statements is true of vertical territorial and customer restraints? A. They are a type of price restraint. B. They arise from agreements among competitors. C. They encourage intrabrand competition. D. The rule of reason is to be applied to such restraints.

Q: _____ permits a customer to buy or lease a desired product only if he/she also buys or leases another, less desirable product. A. A tying arrangement B. Price discrimination C. A predatory pricing strategy D. Conscious parallelism

Q: Which of the following is a vertical restraint of trade? A. Horizontal price fixing B. Refusal to deal C. Tying arrangements D. Dividing territories

Q: Which of the following is true of horizontal price fixing? A. Its occurrence need not be proved. B. It is to be resolved under the rule of reason. C. It is imposed by suppliers on their buyers. D. Their mere existence constitutes unlawful conduct.

Q: _____ is fully lawful because competitors have not agreed either explicitly or by implication to follow the same course of action. A. Vertical price fixing B. Bundling C. Horizontal price fixing D. Conscious parallelism