Question 1

Once a particular kind of activity is classified as a ________violation, the courts do not apply the case-by-case rule of reason analysis but proceed directly to a consideration of the appropriate remedy in the particular case.
A) rule of reason
B) per se
C) consent decree
D) Noerr doctrine

Accepted Answer

When an activity is classified as a per se violation, it means that the activity is inherently anti-competitive and no further analysis is required. Instead, the appropriate remedy is considered directly in the particular case.

Question 2

Which of the following is the reason why the Webb Pomerene Act is cited as a criticism of the United States' antitrust laws?
A) because it encourages foreign companies to invest in the United States
B) because it exempts U.S. export associations from compliance with the Sherman Act
C) because it provides tax cuts for subsidiaries of foreign-national companies in the United States
D) because it allows for punitive treble damages to be brought by private plaintiffs

Accepted Answer

The Webb-Pomerene Act exempts U.S. export associations from compliance with the Sherman Act, which is a key U.S. antitrust law. Critics argue that this exemption undermines the effectiveness of U.S. antitrust laws by allowing export associations to engage in anti-competitive behavior without fear of legal repercussions.

Question 3

Which of the following is true of a subsidiary?
A) A subsidiary is used to operate a parent company's holding company.
B) A subsidiary does not actually conduct business; rather, it functions as a foreign contact point.
C) A subsidiary insulates the parent company from unlimited liability.
D) A subsidiary is a part of the parent company and is not separately incorporated.

Accepted Answer

A subsidiary is a separate legal entity from the parent company, which insulates the parent company from unlimited liability. This means that the subsidiary can be held liable for its own debts and obligations, without affecting the financial health of the parent company. A subsidiary does conduct business on its own, and may operate in a foreign country, but this is not the primary purpose of a subsidiary. A subsidiary can be separately incorporated, or can be a part of the parent company's legal structure, depending on how it is set up.

Question 4

The American antitrust laws authorize a court to assume personal jurisdiction if a defendant has the contacts specified by ________.
A) the Federal Trade Commission Act
B) Section 1 of the Sherman Act
C) an applicable state long arm statute
D) the Robinson-Patman Act

Accepted Answer

The American antitrust laws, including the Sherman Antitrust Act, allow for personal jurisdiction over defendants if they have sufficient minimum contacts with the forum state, as specified by that state's long-arm statute.

Question 5

Which of the following is true of a company's agent situated in a foreign country?
A) An agent is not subject to the supervision of its parent company.
B) An agent's authority is equal to that of the parent company.
C) An agent has to be separately incorporated in the foreign country to be considered legal.
D) An agent is not subject to the laws of the parent-nation.

Accepted Answer

The answer of Which of the following is true of...

Question 6

Which of the following describes the long arm statute?
A) A law defining the kinds of partnerships that can be formed between corporations or individuals and foreign companies.
B) A law defining the conduct of a foreign person within a state that will subject that person to the jurisdiction of the state.
C) A law defining the kind of companies that a company can set up in a foreign country.
D) A law defining the kinds of awards that can be sought in an anti-trust case against the government.

Accepted Answer

The long arm statute is a law that defines the conduct of a foreign person within a state that will subject that person to the jurisdiction of the state. This means that if a foreign person or company engages in certain activities within a state, they can be sued in that state's courts under the long arm statute.

Question 7

Under the ________, companies carrying on business outside the United States will come within the subject-matter jurisdiction of an American court if their business activity is intended to affect U.S. commerce and is not de minimis.
A) national eligibility test
B) minimum contact test
C) effects test
D) per se test

Accepted Answer

The effects test, also known as the effects doctrine or the effects principle, is a criterion used in determining whether the subject-matter jurisdiction of a court extends to a dispute arising out of a foreign business activity. Under the effects test, a court may assert jurisdiction over a foreign company if its activities abroad have a substantial effect on U.S. commerce and if the exercise of jurisdiction is reasonable and fair. This test is often used in cases involving antitrust, securities fraud, and patent infringement, among other types of disputes. The effects test is derived from the U.S. Supreme Court's decision in the case of United States v. Aluminum Co. of America (1945), commonly referred to as the Alcoa case.

Question 8

The ________ is a rule applied by courts on a case-by-case basis requiring them to consider all of the circumstances in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition in violation of Sherman Act Section 1.
A) per se rule
B) choice of law rule
C) rule of reason
D) rule of reciprocity

Accepted Answer

The rule described in the question is known as the rule of reason. It requires courts to consider all relevant circumstances and evidence to determine whether a practice violates antitrust laws, rather than automatically considering it illegal (per se rule) or relying on a particular choice of law (choice of law rule) or reciprocity.

Question 9

________ is a per se violation, where a seller at one level sells goods to a buyer at a different level on the condition that the latter will not resell below an agreed-upon price.
A) Group boycott
B) Vertical price fixing
C) Horizontal price fixing
D) Horizontal market division

Accepted Answer

Vertical price fixing is when a seller at one level of distribution sets a minimum price for a product or service, which the buyer at the next level must adhere to. This is considered a per se violation of antitrust laws, as it limits competition and can result in higher prices for consumers.

Question 10

Which of the following tests is used to determine whether a court has subject-matter jurisdiction in an American antitrust case?
A) the effects test
B) the minimum contact test
C) the national eligibility test
D) the per se test

Accepted Answer

The effects test is used to determine whether a court has subject-matter jurisdiction in an American antitrust case. This test looks at whether the alleged antitrust violations have a significant impact on the domestic market. The other options listed (B, C, and D) are not relevant to determining subject-matter jurisdiction in an antitrust case.

Question 11

________ prohibits contracts, agreements, and conspiracies that restrain interstate or international trade.
A) Section 2 of the Taft-Hartley Act
B) Section 2(a) of the Robinson-Patman Act
C) Section 4 of the Clayton Act
D) Section 1 of the Sherman Act

Accepted Answer

Section 1 of the Sherman Act prohibits contracts, agreements, and conspiracies that restrain interstate or international trade. The other options are sections of different acts that address different aspects of antitrust laws.

Question 12

The Robinson-Patman Act of 1936 was added to the panoply of American anti-trust law to make ________ illegal.
A) anticompetitive mergers
B) tying arrangements
C) monopolization
D) price discrimination

Accepted Answer

The Robinson-Patman Act of 1936 specifically addresses price discrimination and makes it illegal for companies to charge different prices to similar buyers, unless it can be justified on the basis of cost savings or other legitimate reasons. It does not directly address anticompetitive mergers, tying arrangements, or monopolization, although these practices may also be targeted under other antitrust laws.

Question 13

The _______ is a jurisdictional test required by due process that looks to see if a person had such associations with a state, did business within the state, and could reasonably have anticipated that it would have to defend itself there.
A) effects test
B) minimum contacts test
C) jurisdictional rule of reason test
D) per se test

Accepted Answer

The description provided of the jurisdictional test corresponds to the minimum contacts test, which is a doctrine that enables a state court to assert jurisdiction over a nonresident defendant if the defendant has established sufficient minimum contacts with the forum state. The effects test refers to a form of extraterritorial jurisdiction, the per se test is a standard used in antitrust law, and the jurisdictional rule of reason test is not a commonly used legal term.

Question 14

The ________ was enacted in 1914 to expand the enforcement provisions of the Sherman Antitrust Act. It defines exclusive dealing and tying clauses, mergers that result in monopolies, and interlocking directorates as being unfair business practices.
A) Federal Trade Commission Act
B) Sherman Act
C) Robinson-Patman Act
D) Clayton Act

Accepted Answer

The Clayton Act was enacted in 1914 and it expanded the enforcement provisions of the Sherman Antitrust Act. It defines exclusive dealing and tying clauses, mergers that result in monopolies, and interlocking directorates as being unfair business practices. The Federal Trade Commission Act, Robinson-Patman Act are other acts that deal with antitrust issues but they were enacted later.

Question 15

Once a particular kind of activity is classified as a per se violation, the courts then ________.
A) apply the case-by-case rule of reason analysis for that particular case
B) directly consider an appropriate remedy for that particular case
C) consider the level of justifiability of the violation for that particular case
D) check if the violation breaches Section 1 of the Sherman Act

Accepted Answer

When an activity is classified as a per se violation, it means that the activity is considered inherently illegal, and the courts move directly to considering an appropriate remedy for the violation, bypassing the need for a detailed analysis of its effects on competition.

Question 16

Which of the following acts forbids monopolies and attempts to monopolize commerce or trade either between the states of the United States or in international commerce affecting the United States?
A) Section 2 of the Sherman Act
B) Section 2(a) of the Robinson-Patman Act
C) Section 4 of the Clayton Act
D) Section 7 of the Clayton Act

Accepted Answer

Section 2 of the Sherman Act forbids monopolies and attempts to monopolize commerce or trade either between the states of the United States or in international commerce affecting the United States.

Question 17

A(n) ________ is a subsidiary company that in turn owns other subsidiaries.
A) agency
B) representative office
C) branch
D) holding company

Accepted Answer

A holding company is a type of company that owns stock in other companies, called subsidiaries. These subsidiaries can be other holding companies or operating companies that participate in different industries. As such, a holding company is a company that simply exists to own other companies.

Question 18

The ________ is a federal statute enacted in 1890 that forbids combinations and conspiracies in restraint of interstate and international trade.
A) Clayton Act
B) Sherman Antitrust Act
C) the Federal Trade Commission Act
D) Robinson-Patman Act

Accepted Answer

The correct answer is the Sherman Antitrust Act, as it is the federal statute enacted in 1890 that forbids combinations and conspiracies in restraint of interstate and international trade. The Clayton Act, Federal Trade Commission Act, and Robinson-Patman Act are federal statutes that address other aspects of antitrust regulation, such as mergers and fair competition.

Question 19

Which of the following is true of American anti-trust laws?
A) It does not require the defendant to have personal jurisdiction.
B) It is not affected by the long arm statute.
C) It can only award treble charges in cases involving the government.
D) It can be applied only when the court has subject-matter jurisdiction.

Accepted Answer

American anti-trust laws can only be applied when the court has subject-matter jurisdiction, meaning the court must have the authority to hear the type of case being presented. This is because anti-trust laws are a part of federal law and can only be enforced by federal courts with proper jurisdiction. Personal jurisdiction and the long arm statute are related to whether the court has the authority to hear a case based on the location of the defendant, but they do not affect subject-matter jurisdiction. Treble damages (charges) can be awarded in both government and private suits under anti-trust laws.

Question 20

A ________ is an association of persons or companies that are involved in a collaboration for more than a transitory period.
A) joint venture
B) branch
C) representative office
D) subsidiary

Accepted Answer

A joint venture is a business arrangement in which two or more parties agree to pool their resources in order to achieve a specific goal or complete a specific project. Joint ventures are often formed for a more extended period than a transitory period, commonly lasting for several years. Branches, representative offices, and subsidiaries may also exist for an extended period, but they are not necessarily involved in a collaboration with other persons or companies.

Quiz 4: The Multinational Enterprise

Once a particular kind of activity is classified as a ________violation, the courts do not apply the case-by-case rule of reason analysis but proceed directly to a consideration of the appropriate remedy in the particular case.

Which of the following is the reason why the Webb Pomerene Act is cited as a criticism of the United States' antitrust laws?

Which of the following is true of a subsidiary?

The American antitrust laws authorize a court to assume personal jurisdiction if a defendant has the contacts specified by ________.

Which of the following is true of a company's agent situated in a foreign country?

Which of the following describes the long arm statute?

Under the ________, companies carrying on business outside the United States will come within the subject-matter jurisdiction of an American court if their business activity is intended to affect U.S. commerce and is not de minimis.

The ________ is a rule applied by courts on a case-by-case basis requiring them to consider all of the circumstances in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition in violation of Sherman Act Section 1.

________ is a per se violation, where a seller at one level sells goods to a buyer at a different level on the condition that the latter will not resell below an agreed-upon price.

Which of the following tests is used to determine whether a court has subject-matter jurisdiction in an American antitrust case?

________ prohibits contracts, agreements, and conspiracies that restrain interstate or international trade.

The Robinson-Patman Act of 1936 was added to the panoply of American anti-trust law to make ________ illegal.

The _______ is a jurisdictional test required by due process that looks to see if a person had such associations with a state, did business within the state, and could reasonably have anticipated that it would have to defend itself there.

The ________ was enacted in 1914 to expand the enforcement provisions of the Sherman Antitrust Act. It defines exclusive dealing and tying clauses, mergers that result in monopolies, and interlocking directorates as being unfair business practices.

Once a particular kind of activity is classified as a per se violation, the courts then ________.

Which of the following acts forbids monopolies and attempts to monopolize commerce or trade either between the states of the United States or in international commerce affecting the United States?

A(n) ________ is a subsidiary company that in turn owns other subsidiaries.

The ________ is a federal statute enacted in 1890 that forbids combinations and conspiracies in restraint of interstate and international trade.

Which of the following is true of American anti-trust laws?

A ________ is an association of persons or companies that are involved in a collaboration for more than a transitory period.