Q&A Hero

Q: Title VII disparate impact suits involve situations in which an employer has treated an individual differently because of the person's race, sex, color, religion or national origin.

Q: The Age Discrimination in Employment Act protects people aged 40 and over from age discrimination.

Q: The Equal Pay Act (EPA) prohibits discrimination in pay based on gender.

Q: Although the Occupational Safety and Health Administration (OSHA) administers the Occupational Safety and Health Act, OSHA is not empowered to inspect businesses to enforce those regulations.

Q: The Occupational Safety and Health Act applies to all employers engaged in a business affecting interstate commerce.

Q: The Family and Medical Leave Act requires employers to pay employees while they take leave for one of the reasons stated in the act.

Q: Unemployment compensation is provided entirely at the federal level, and the states have no role to play in this matter.

Q: The Fair Labor Standards Act requires double-pay for all working hours in excess of 40 per week.

Q: Recovery for occupational diseases is allowed under the workers' compensation system.

Q: All of the fifty states in the United States have a Workers Compensation system.

Q: Mr. Blue is driving to work and gets into an accident. Since he was on his way to work Mr. Blue will be able to recover damages through his state's Workers Compensation system.

Q: Social security basically is a social compromise.

Q: The amount recoverable by an injured employee under each category of damages from a workers' compensation system is frequently more than or at least equivalent to what would be obtained in a successful negligence suit.

Q: Okeydokey, Inc. sells its canned beets to its wholly owned subsidiary, Buylow Co., which then sells the beets in the nationwide chain of Buylow grocery stores. In addition, Okeydokey sells canned beets to various other grocery store chains. The beets sold by Okeydokey to Buylow are packaged by Okeydokey under the Buylow label. The beets sold by Okeydokey to the other grocery store chains are packaged under the Okeydokey label. Despite the different names, however, the beets sold by Okeydokey under the two labels are the same in quality. The price at which Okeydokey sells the beets to Buylow is significantly lower than the price at which it sells the beets to the other chains. One of the other chains has brought a Robinson-Patman Act lawsuit against Okeydokey on the theory that Okeydokey engaged in price discrimination. Has Okeydokey violated the Robinson-Patman Act? Explain your reasoning.

Q: Bunyan Corp. has patented a revolutionary chainsaw. In order to maximize the revenues from its patent and recover its research and development expenses, Bunyan requires other manufacturers that make the chainsaw under license from Bunyan to adhere to a minimum price schedule. Bunyan also requires its retail dealers to adhere to a minimum resale price schedule. The Justice Department has challenged Bunyan's marketing practices as unlawful. Is the challenge valid? Explain your reasoning.

Q: Workers' compensation protects not only employees, but independent contractors as well.

Q: Minisculea, a small nation that exists on a Pacific Ocean island, is a major producer and seller of a substance known as XYZ. Minisculea is also the leader of a cartel of other XYZ producers. The cartel has raised XYZ prices, a fact of significant concern to the United States, given the many strategic uses to which XYZ can be put. U.S. officials have engaged in ongoing discussions with Minisculea about this subject. If Minisculea and the other cartel members are sued in a U.S. court for allegedly violating the U.S. antitrust acts by fixing the price at which they sold XYZ to U.S. customers, their best defense would be: A. the state action doctrine. B. the sovereign compulsion doctrine. C. the doctrine of sovereign immunity. D. the act of state doctrine.

Q: Acme Co., a widget manufacturer, is acquiring Basic, Inc., another widget manufacturer. In view of the nature of the widget industry, a manufacturer's sales territories tend to correspond closely to the states in which it has manufacturing plants. Both Acme and Basic have plants in North Carolina, South Carolina, Tennessee, and Kentucky. In addition, Acme has plants in Illinois and Indiana, and Basic has a plant in Ohio. The post-merger market share of the two firms is likely to be 5 percent in the combined North Carolina, South Carolina, Tennessee, Kentucky, Illinois, Indiana, and Ohio markets, 10 percent in the combined North Carolina, South Carolina, Tennessee, and Kentucky markets, and 32 percent in the combined North Carolina-South Carolina market, where Acme and Basic have been historically strong competitors. Which of the above markets is likely to be treated as the relevant geographic market for purposes of determining the legality of the acquisition? Why that market?

Q: Bigcorp, Inc., a huge conglomerate with interests in various industries, is acquiring Odorific Co., the nation's leading manufacturer of men's socks. None of Bigcorp's current "family" of companies purchases socks, nor do any of Bigcorp's suppliers. Bigcorp purchased Odorific after a study conducted by Bigcorp concluded that startup costs in the sock industry made a de novo entry impractical, and that none of the existing men's sock manufacturers other than Odorific could be acquired for a reasonable price. Odorific's competitors were stunned by the acquisition. They wish to challenge the acquisition. Which theory of attack best suits this case? Explain your reasoning.

Q: Soundco, Inc., a leading manufacturer of stereo equipment, sells equipment to both wholesalers and retailers. Soundco regularly charges wholesalers less than it charges retailers for the same equipment. Contending that this pricing practice violated the Robinson-Patman Act, various retailers have sued Soundco. What should Soundco argue in an effort to avoid liability?

Q: Section 2(b) of the Robinson-Patman Act allows a seller to price discriminate in certain geographic areas if the competition has a lower price. What can the seller lower the price to according to section 2(b)? A. To the same price as the competitor B. To intentionally create a price that beats the competitor C. 10% discount off the list price of the seller D. 50% discount off the list price of the seller

Q: _____ of the Robinson-Patman Act prevents large buyers, either directly or through subsidiary brokerage agents, from receiving phony commissions or brokerage payments from their suppliers. A. Section 2(f) B. Section 2(c) C. Section 2(a) D. Section 2(e)

Q: _____ of the Robinson-Patman Act makes it illegal for a buyer knowingly to induce or receive a discriminatory price in violation of Section 2(a) of the Robinson-Patman Act. A. Section 2(f) B. Section 2(c) C. Section 2(d) D. Section 2(e)

Q: Which of the following are exempted from antitrust violations under the Clayton Act? A. Funeral homes and services B. Roofers and shingle manufactures C. Agricultural Cooperatives D. Wireless phone services

Q: Stitchwell is an apparel manufacturer. Huge Mart, a wholesale dealer, is its largest customer. Huge Mart also owns Gorgeous, a department store chain that deals in apparels, shoes, and accessories. Stitchwell routinely offers "wholesaler special" discounts to Huge Mart and other wholesalers. Are these discounts illegal? A. Yes, these discounts are per se illegal under Section 2(a) of the Robinson-Patman Act. B. No, these discounts are not illegal because Stitchwell can legally set resale prices. C. Yes, these discounts will be deemed illegal if Huge Mart passes them on to Gorgeous customers. D. No, these discounts are not illegal considering they are provided only for wholesalers.

Q: Proof of _____ is often offered as evidence of a seller's anticompetitive intent when proving a primary level violation of the Robinson-Patman Act. A. functional discounts B. predatory pricing C. quantity discounts D. accumulation pricing

Q: For _____, cost justification is the primary statutory defense to liability under Section 2(a) of the Robinson-Patman Act. A. functional discounts B. accumulation pricing C. quantity discounts D. predatory pricing

Q: Filene's Basement filed for bankruptcy in May 2009. In November 2009, Filene's Basement started its "going-out-of-business" sales. Are such price discriminations legal? A. No, such discounts are per se illegal under Section 7 of the Clayton Act. B. Yes, such discounts are legal because Filene's Basement can legally set resale prices. C. Yes, such discounts are legal under the statutory defense of changing conditions. D. No, such discounts are illegal considering they are provided only for a limited time.

Q: Section 2(a) of the Robinson-Patman Act does not directly address the legality of: A. functional discounts. B. partial payment discounts. C. quantity discounts. D. accumulation discounts.

Q: Which of the following is most likely to violate Section 2(a) of the Robinson-Patman Act? A. Refusing to sell except at a discriminatory price B. Price discrimination for sales to different purchasers made at the same time C. Discriminating between customers when quoting prices D. Price discrimination in consignment transactions

Q: Mel owns Melco, Inc., which manufactures toys. She provides a functional discount to Carol, a wholesaler of toys. Carol then passes on her discount to Nina, who owns Funland, a toy store. Nina is then able to offer lower prices to toy purchasers. Under the Robinson-Patman Act, this is: A. tertiary level price discrimination. B. secondary level price discrimination. C. valid, if Nina is not in the same territory as Mel. D. valid, as Nina and Carol are not competitors.

Q: A large drug company has recently started a promotional deal. This deal involves discounts to pharmacies for buying its drugs. The discounts are linked to the total dollar amount purchased. This deal also provides for restaurant vouchers for representatives of the pharmacies who feature among the top ten buyers of the company's drugs. Which of the following laws is this deal most likely to violate? A. Section 7 of the Clayton Act B. The Robinson-Patman Act C. Section 2 of the Sherman Act D. The Hart-Scott-Rodino Antitrust Improvement Act

Q: Big Corp. (BC) operated in all 50 states. In all the states except Oregon, BC was the dominant firm in its industry. Small Corp. (SC) operated only in Oregon, but was the dominant firm in that state. BC decided it wanted to destroy SC so that it would become dominant in Oregon. BC cut its prices and sold below cost in Oregon, while maintaining regular prices everywhere else. This is an example of: A. first-line price discrimination B. secondary level price discrimination C. tertiary level price discrimination D. super-tertiary level price discrimination

Q: Big Corp. (BC) is in the business of making and selling plastic products. Dominant and Micro both buy plastic products of similar grade and quality regularly from BC. Dominant is the biggest customer of BC while Micro usually buys very small quantities. Due to an unexpected shortfall of raw materials, BC anticipates significant reduction in plastic production at its plants. In order to maintain supply of plastic products to Dominant, BC quotes a 40 percent higher price for its products to Micro. Will this amount to a violation of Section 2(a) of the Robinson-Patman Act? A. Yes, because BC is committing primary level price discrimination. B. No, because Dominant deserves the preferential treatment. C. Yes, because BC is adversely affecting competition at its customer's level. D. No, because BC has not made any sales at higher prices to Micro.

Q: Bob is on the Board of Directors of both Acme Corporation and Beta Corporation. Acme recently acquired Teen Co., a retailer of teen girls' clothing. Beta Corporation had previously acquired Limitless Co., another retailer of teen girls' clothing. Except the teen girls' clothing business, Acme and Beta do not have any other competing businesses. Under the Antitrust Amendments of 1990: A. Bob must resign from the Board of Directors of both Acme and Beta corporations. B. Bob must resign from the Board of Directors of Acme Corporation. C. Bob need not resign from either Board of Directors if the teen girls' clothing business contributes minimally to either organization's sales. D. Bob need not resign until a competitor of Limitless and Teen Co. successfully challenges Acme's acquisition.

Q: In reference to Section 8 of the Clayton Act, what does the term interlock mean? A. When the same corporate officers serve in competing corporations B. When the capital funding a corporation is from a foreign country C. When a corporation is incorporated by federal government instead of the state D. When competitors are using the same supplier in the same market

Q: Which Section of The Clayton Act originally prohibited local and territorial price discrimination by sellers? A. Section 2 B. Section 3 C. Section 7 D. Section 8

Q: Predatory Co., a large company entering a new geographic market, decided to eliminate its smaller rivals in the new market by selling below cost in that market (but not elsewhere) until the rivals were forced out of business. This type of price discrimination is classified as: A. super-tertiary level discrimination. B. tertiary level discrimination. C. primary level discrimination. D. secondary level discrimination.

Q: Odyssey Corp., a wholesaler of children's toys, sells retailers across the country the exceedingly popular Trojan Horse toy at a price of $14 per item. Odyssey has learned that one of its competitors, Iliad Co., is selling the Trojan Horse toy at a price of $12 per item to all retailers in the state of Utah. Odyssey would like to respond appropriately to Iliad's actions. Which of the following statements accurately sets forth how Odyssey may respond without risking a violation of the Robinson-Patman Act? A. Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers, while keeping the price at $14 per item for retailers elsewhere in the country. B. Odyssey may begin selling the Trojan Horse toy at a price of $11.75 per item to Utah retailers, while keeping the price at $14 per item for retailers elsewhere in the country. C. Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers, but only if it lowers the price to $12 per item for retailers elsewhere in the country. D. Odyssey may begin selling the Trojan Horse at price of $11.75 per item all over the country.

Q: Humongous Corp., a conglomerate with interests in various industries, recently acquired Perfect Petrochemicals Co., a prominent producer of petroleum products that are used in manufacturing plastic. This acquisition was a complete surprise to Perfect's competitors, who never thought that Humongous had any desire to become involved in the petrochemical production business. Companies A and B owned by Humongous used plastic as a raw material. None of the companies under the Humongous umbrella made plastic, therefore A and B bought plastic from outside suppliers who used petrochemical products as raw material to make plastic. Which of the following theories is the most appropriate one for challenging the acquisition of Perfect by Humongous under Section 7 of the Clayton Act? A. Elimination of actual potential competition B. Potential reciprocity C. Unfair advantage D. Elimination of perceived potential competition

Q: Gorgeous is a conglomerate and its major businesses include department store chains and grocery store chains. Gorgeous recently acquired Connect Corp., a mobile-network operator. Connect has the third-largest share of the mobile-network market. This is Gorgeous's first venture into the mobile-network business. Which of the following theories is the most appropriate one for challenging the acquisition of Connect by Gorgeous under Section 7 of the Clayton Act? A. Elimination of actual potential competition B. Potential reciprocity C. Unfair advantage D. Elimination of perceived potential competition

Q: Initially, Section 8 of the Clayton Act prohibited any person from serving as a director of two or more competing corporations (other than banks or common carriers) if each corporation had capital, surplus, and undivided profits aggregating more than _____. A. $1 million B. $5 million C. $10 million D. $20 million

Q: Section 8 of the Clayton Act requires a _____ analysis of behavior for determining liability. A. quick-look B. per se C. secondary D. rule of reason

Q: Section 8 of the Clayton Act, as modified by the Antitrust Amendments Act of 1990, prohibits the same individuals from controlling competing corporations when those individuals are: A. shareholders. B. directors or senior officers. C. mid-level officers. D. managerial employees.

Q: Huge, Inc. owns an East coast grocery chain. It has recently acquired a West coast grocery chain. This is an example of a: A. product extension merger. B. horizontal merger. C. market extension merger. D. vertical merger.

Q: Which types of mergers have traditionally been subject to the greatest degree of scrutiny under the Clayton Act? A. Horizontal mergers B. Vertical mergers C. Conglomerate mergers D. Product-extension mergers

Q: Zenith Co. is a company that manufactures cloth. It purchases the cotton required as raw material from Yell Mart. Zenith Co. acquires Yell Mart. Identify the type of merger. A. Vertical merger B. Horizontal merger C. Conglomerate merger D. Symmetrical merger

Q: Which of the following is an accurate statement about vertical mergers? A. Vertical mergers take place between formerly competing firms. B. Vertical mergers do not directly result in an increase in concentration. C. Vertical mergers constitute a per se violation of Clayton Act Section 7. D. Vertical mergers have minimal effects on economic efficiencies.

Q: Historically, courts seeking to determine the legality of vertical mergers have first tended to look at: A. the increase in market entry barriers for new competitors. B. the elimination of potential competition in the acquired firm's market. C. the economic efficiency of such vertical integration. D. the share of the relevant market foreclosed to competition.

Q: Mini Corp. and Huge, Inc. are competitors. Mini holds the single largest market share in the markets they compete in. Huge is third in terms of market share. Mini plans to acquire Huge. Which of the following, if true, would help bolster a conclusion that the acquisition is lawful under Clayton Act Section 7? A. That Mini has had a history of acquiring ownership over competitors in order to increase its market share. B. That there are about 25 competitors other than Mini and Huge while there were only 10 competitors 10 years ago. C. That Mini has a 25 percent market share now and would only be increasing its market share by another 10 percent by acquiring Huge. D. That Huge is an aggressive firm and it has developed a plethora of patentable technologies in the last five years.

Q: Strong Corp. and Marginal, Inc. are competitors. Strong plans to acquire ownership of Marginal. Which of the following, if true, would help bolster a conclusion that the acquisition is lawful under Clayton Act Section 7? A. That the industry in which Strong and Marginal are competitors has become increasingly concentrated in recent years. B. That Strong has had a history of acquiring ownership over competitors in order to increase its market share. C. That Strong has a 35 percent market share now and would only be increasing its market share by another 10 percent by acquiring Marginal. D. That Marginal is teetering on the brink of bankruptcy and only Strong is interested in purchasing Marginal.

Q: Which of the following is a market share factor that federal regulators consider when determining the legality of horizontal mergers? A. The probability of increasing concentration in the relevant market. B. The prior conduct of the acquiring firm and the acquired firm. C. The existence of barriers to the entry of new competitors into the relevant market. D. The probable future competitive strength of the acquired firm.

Q: Which of the following is an accurate statement about exclusive dealing agreements? A. The qualitative substantiality test for gauging the legality of exclusive dealing agreements has prompted much criticism. B. Exclusive dealing agreements are unlawful even when they have minimal effect on competition or monopolization. C. The preventive nature of the Clayton Act does not allow it to cover exclusive dealing agreements. D. Historically, exclusive dealing agreements involving a "not insubstantial" amount of commerce have been declared illegal.

Q: Mr. Blue and Mr. Yellow own all the casinos in Delta City. Mr. Green wants to open but finds it too difficult to break into the market. Mr. Green sues Mr. Blue and Mr. Yellow for antitrust violation under the Clayton Act. What is the likely reason for the case being dismissed? A. The Clayton Act does not deal with antitrust issues associated with real estate and services. B. The Clayton Act does not permit a plaintiff to sue two defendants. C. Gambling is a vice and as such cannot be litigated in the court system. D. The common law is that businesses cannot sue after failing to establish themselves in the commercial market.

Q: Section 7 of the Clayton Act prohibits mergers where evidence indicates that the merger: A. is between companies who are solely engaged in intrastate commerce. B. may have the effect of substantially lessening competition in any line of commerce. C. involves companies that manufacture functionally uninterchangeable products. D. involves companies that might fail if they were not allowed to merge.

Q: _____ attempts to bar mergers that may have an anticompetitive effect. A. Section 7 of the Clayton Act B. Section 2 of the Sherman Act C. Section 3 of the Clayton Act D. Section 1 of the Sherman Act

Q: Which of the following requires parties to the merger agreement for planned mergers involving dollar values of stock or assets exceeding certain amounts to provide advance notice to the FTC and the Justice Department? A. Section 7 of the Clayton Act B. The Robinson-Patman Act C. Section 2 of the Sherman Act D. The Hart-Scott-Rodino Antitrust Improvement Act

Q: The courts in determining if a merger is anticompetitive will look at the area that will have effects that are direct and immediate. What is the term for this analysis? A. Relevant Geographic Market B. International Risks Test C. Irrelevant Geographic Means D. Domestic Risk Analysis

Q: One of the elements that must be demonstrated before a challenged tying agreement will be held to violate Section 3 of the Clayton Act is that: A. the tying product was available for purchase without the agreement. B. the seller had substantial market power in the market for the tied product. C. the seller's tying arrangements restrained a "not insubstantial" volume of commerce in the tied product. D. the challenged agreement involved two integrated components of a larger product.

Q: Technoco, Inc., a manufacturer of computers and related equipment, has been requiring wholesalers and retailers who purchase computers from it to also purchase printers as a condition of buying computers. One of Technoco's customers has challenged the legality of this practice. Which of the following factors would weigh against the illegality of this practice? A. Evidence that Technoco's computers are generally considered to be inferior to those of its competitors. B. Evidence that many other computer manufacturers will sell computers without requiring purchases of printers. C. Evidence that Technoco is a small company whose total printer sales in the period in question amounted to $19,000. D. Evidence that Technoco's computers are generally considered to be superior to those of its competitors.

Q: The qualitative substantiality test was employed by the Supreme Court in the landmark case of: A. Tampa Electric Co. v. Nashville Coal Co. B. Standard Oil Co. v. United States. C. Olin Corporation v. Federal Trade Commission. D. Federal Trade Commission v. Staples, Inc.

Q: Reliable Corp. owns the nationwide chain of Reliable Auto Repair shops. Although Reliable has the single largest share in the nationwide auto repair market, the intensely competitive nature of this market means that Reliable's share is only 8 percent. In a lawsuit filed against Reliable, the plaintiff alleges that Reliable regularly agrees to provide automobile repairs only if the customer whose car needs repairs also agrees to purchase a certain paste wax manufactured by Reliable. The plaintiff asserts that this practice by Reliable violated Clayton Act Section 3. Which of the following is the strongest argument for Reliable to make in an effort to avoid liability? A. That Reliable does not possess sufficient auto repair market power to appreciably restrain competition in the paste wax market. B. That most of its customers need to buy paste wax anyway. C. That auto repairs are not a commodity. D. That Reliable's competitors in the sale of paste wax are doing quite well, regardless of how much paste wax Reliable may sell in this manner.

Q: Bob and Evan both own tanning salons in Ridgemont, California. They form the "Slow Growth Society of Ridgemont" as a lobbying group to persuade Ridgemont City Council to pass a zoning ordinance that would effectively prohibit new personal services businesses such as tanning salons in Ridgemont. This is prohibited under the Sherman Act.

Q: The Noerr-Pennington doctrine provides an exception to the Clayton Act.

Q: The Foreign Sovereign Immunities Act (FSIA) provides that all commercial activities of foreign sovereigns and their agents are exempt from antitrust liability.

Q: Which Act did the Congress envision as a vehicle in 1914 for attacking practices that monopolists employed to acquire monopoly power? A. Sherman Act B. Clayton Act C. Robinson-Patman Act D. Smith-Lever Act

Q: There is/are no _____ for violating the provisions of the Clayton Act. A. injunctive relief B. treble damages C. cease-and-desist orders D. criminal penalties

Q: The Robinson-Patman Act prohibits sellers from making discriminatory payments to competing customers for such customer-performed services as advertising and promotional activities.

Q: The McCarran-Ferguson Act does not exempt all actions by insurance companies from antitrust liability.

Q: According to the Clayton Act, trade unions and their activities can be construed as illegal. FALSE The Clayton Act provides that labor unions are not conspiracies in restraint of trade and their behavior is not considered illegal.

Q: The Local Government Antitrust Act of 1984 eliminates damage actions against municipalities and their officers, agents, and employees for antitrust violations and makes injunctive relief the sole remedy in such cases.

Q: Ordinarily, higher degree of proof of likely competitive injury is required in cases involving secondary level price discrimination.

Q: There are three major defenses to price discrimination under the Robinson-Patman Act.

Q: In the EU, the Commission has considerable authority to quash a merger through its own action.

Q: The Robinson-Patman Act applies to discriminatory acts that occur in trade and commerce.

Q: The Robinson-Patman Act applies if a Texas manufacturer discriminated in price in sales to two Texas customers.

Q: The Robinson-Patman act outlawed secondary and tertiary price discrimination.

Q: Vertical mergers directly result in an increase in concentration.

Q: There are no criminal penalties for violating the Clayton Act.

Q: Section 7 of the Clayton Act prohibits mergers of companies that would lessen competition in the market or create a monopoly.