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Business Law
Q:
International Silicon Corporation, which controls 40 percent of the computer-chip market in the United States, merges with Micro Processors, Inc., which controls 15 percent of the same market. Under the Clayton Act, this merger is
a. a violation only if the result more clearly concentrates the market.
b. a violation only if the result makes it more difficult for potential competitors to enter the market.
c. a violation if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market.
d. not a violation.
Q:
Green Grocery Company acquires Home Produce Corporation. This is
a. a merger.
b. an exclusive-dealing contract.
c. an interlocking directorate.
d. a tying arrangement.
Q:
Agri-Products Corporation offers to sell its sugar substitute to Best Candies, Inc., only if Best agrees to buy all the corn it needs from Agri-Products, even though there are other corn sellers from whom Best could buy. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. price fixing.
Q:
By contract, Quality Metals Corporation forbids Resource Refining, Inc., a wholesale buyer of Quality's products, from purchasing the products of Quality's competitors. This exclusive-dealing contract is allowed
a. under any circumstances.
b. unless its effect is to cause a competitor a loss of any business.
c. unless its effect is to substantially lessen competition.
d. unless there is no effect on a competitor.
Q:
International Software, Inc., conditions the sale of one of its products on Nationwide Office System's agreeing to buy another of International's products. This deal is
a. legal, depending on its purpose and the effect on competition.
b. legal, depending on production and transportation costs.
c. legal under any circumstances.
d. not legal under any circumstances.
Q:
First Product Company has exclusive control over the market for its product. First Product's market power is subject to evaluation under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Interstate Commerce Act.
d. the Sherman Act.
Q:
An antitrust action is brought against Tri-State Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Tri-State's attempt must have
a. a dangerous probability of success.
b. a deadly guaranty of success.
c. a distant possibility of success.
d. a distinct improbability of success.
Q:
A suit is filed against Maxi Corporation, alleging that the firm committed the offense of monopolization. To determine whether Maxi has monopoly power requires looking at
a. only Maxi's size.
b. only the relevant geographical market.
c. only the relevant product market.
d. the relevant geographical market and the relevant product market.
Q:
To acquire monopoly power in its market, Perfect Plastics, Inc., sets its prices lower than its competitors. Under the Sherman Act, this is
a. a per se violation.
b. a violation if its competitors make similar deals.
c. a violation if it thereby acquires monopoly power.
d. not a violation.
Q:
America's Best Cannery, Inc. (ABC), is one of many producers of canned seafood. ABC refuses to sell its products to Bayside Restaurant Corporation. This refusal is most likely
a. an anticompetitive practice in violation of the Clayton Act.
b. a per se violation of the Sherman Act.
c. a violation of the Sherman Act under the rule of reason.
d. not a violation of antitrust law.
Q:
Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a recreational water products dealership. This is
a. a group boycott.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
Q:
USA Computer Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is
a. a per se violation of the Sherman Act.
b. a violation of the Clayton Act.
c. subject to evaluation under the rule of reason.
d. not subject to antitrust law.
Q:
In Case 41, Continental T.V., Inc. v. GTE Sylvania, Inc., the United States Supreme Court held that a manufacturer's restrictions on the store locations of retailers
a. are per se unlawful under Section 1 of the Sherman Act.
b. must be analyzed under the rule of reason.
c. are lawful under Section 1 of the Sherman Act.
d. do not promote interbrand competition.
Q:
Delta Services, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Efficient Systems Company, another Florida firm. The two firms agree that Delta will operate in south Florida and Efficient will operate in north Florida. This is
a. a group boycott.
b. a market division.
c. a price-fixing agreement.
d. a tying arrangement.
Q:
A-One Components, Inc., a manufacturer of vehicle parts, refuses to sell to Best Fix, Inc., a national vehicle service firm. A-One convinces Coastal Motor Parts Company, a competitor, to do the same. This is
a. a group boycott.
b. an exclusive-dealing contract.
c. a price-fixing agreement.
d. a tying arrangement.
Q:
Music, Inc., Natural Music Company, and Number One Music Corporation control 95 percent of the market for music CDs in a certain geographic area. They agree to sell their products at the same prices, and exclude a fourth firm, Perfect Music Company (which controls the rest of the market). This is
a. a group boycott.
b. an exclusive-dealing contract.
c. a price-fixing agreement.
d. a tying arrangement.
Q:
Alpha Communications, Inc., joins with other businesses in its industry to exchange information, represent members' interests before Congress, and lobby for certain regulatory standards. These joint activities are
a. not subject to antitrust law.
b. per se violations of the Sherman Act.
c. subject to evaluation under the rule of reason.
d. violations of the Clayton Act.
Q:
International Products, Inc. (ICI), has exclusive control over the market for its product. ICI's market power is subject to evaluation under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. none of the above.
Q:
A joint effort by businesspersons to obtain government action is exempt from the prohibitions of antitrust law.
Q:
Only private individuals can enforce the antitrust laws.
Q:
The Federal Trade Commission Act condemns all forms of anticompetitive behavior not covered under other federal laws.
Q:
In determining the legality of a tying arrangement, there are two relevant markets to consider.
Q:
Price discrimination is not always a violation of antitrust law.
Q:
A firm can have a significant degree of market power without violating the antitrust laws.
Q:
A unilateral refusal to deal with a specific party could be considered a violation of antitrust law.
Q:
A vertical restraint is an agreement that restrains competition between firms competing in the same market.
Q:
Territorial and customer divisions are judged under a rule of reason.
Q:
An agreement between firms operating at different levels in the manufacturing and distribution process cannot violate antitrust law.
Q:
If a joint venture does not involve price fixing or market divisions, it cannot be in violation of antitrust law.
Q:
A geographical market division between rival firms is not a violation of antitrust laws.
Q:
A group boycott cannot violate Section 1 of the Sherman Act.
Q:
Any agreement that artificially fixes prices is an unreasonable restraint of trade.
Q:
A price fixing agreement is analyzed under the rule of reason.
Q:
Market power is the power to affect the market price of a product.
Q:
Under the rule of reason, a court will consider the purpose of an agreement between competitors.
Q:
The Sherman Act prohibits individual anticompetitive behavior that produces or is intended to produce monopoly power.
Q:
The Sherman Act prohibits concerted activity that unreasonably restrains trade.
Q:
The basic purpose of antitrust law is to prevent competition.
Q:
Jack owns land located outside Metro City. Jack sells the land to Quality Disposal, Inc., which establishes a hazardous waste disposal facility at the site. Quality Disposal accepts only waste transported by Regional Trucking Company exclusively from Consolidated Industries, Inc. Several years later, Quality Disposal closes its facility and sells the land to Price Rite Corporation, which builds a Price Rite Discount Store on the site. Meanwhile, some of Metro's citizens complain to the Environmental Protection Agency (EPA) that Metro's municipal water supply is polluted. The EPA investigates and discovers that the sources of the pollution are leaks of hazardous waste from what is now the Price Rite property. The EPA cleans up the site. Who can be held liable for the cost of cleaning up the site? What standards must Metro meet regarding the water?
Q:
Resources Mining Company's (RMC) complex spews smoke and odors. The site features its own rail system, and trucks enter and exit the complex night and day. Sam and other residents of an adjacent neighborhood can feel the vibrations of the trains and trucks, and suffer other effects from RMC's operations. Sam and others file a suit against RMC. Why might the court rule in favor of RMC?
Q:
Delta Company, which operates a hazardous waste storage facility, buries unlabeled containers without determining their contents. If the containers leak, Delta may be held to have violated
a. the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) only
b. the Resource Conservation and Recovery Act (RCRA) only.
c. the CERCLA and the RCRA.
d. neither the CERCLA nor the RCRA.
Q:
American Pesticide & Herbicide Company makes agricultural, industrial, and consumer chemical products. Under the Federal Insecticide, Fungicide, and Rodenticide Act, a label on an American product must include
a. directions for use only.
b. directions for use and a list of ingredients only.
c. directions for use, a list of ingredients, and warnings to protect human health only.
d. directions for use, a list of ingredients, warnings to protect human health, and treatment in case of poisoning.
Q:
Green Markets, Inc., which operates grocery stores in six states, must, under federal law, display for customers brochures about pesticides in the foods that the store sells. The brochures are produced by
a. Green.
b. the companies that make the pesticides.
c. the Environmental Protection Agency.
d. the farmers who produce the food.
Q:
International Agricultural Products makes a pesticide that provides a one-in-a-million risk to people of developing cancer from exposure. This substance must be
a. disposed of before anyone develops cancer.
b. registered before it is sold.
c. taken off the market and placed in temporary storage.
d. used only in a way that avoids exposure to people.
Q:
Oily Equipment Company makes its products without required pollution control technology, causing a discharge of oily waste into the nearby Pure Lake. This activity can result in
a. a criminal fine or imprisonment only.
b. a criminal fine, imprisonment, or an injunction only.
c. a criminal fine, imprisonment, an injunction, or damages.
d. an injunction only.
Q:
Mega Solvents Corporation has waste that it wants to discharge into navigable waters. Under the Clean Water Act, Mega must apply for a permit
a. after discharging waste.
b. before discharging waste.
c. during the discharge of waste.
d. only if a regulatory agency challenges the discharge.
Q:
Acme Industries, Inc., operates an oil refinery near Big River, which flows into Cool Lake. Discharging oil from the refinery into the river can result in
a. civil penalties and damages.
b. civil penalties only.
c. damages only.
d. neither civil penalties nor damages.
Q:
Suburban Development Corporation wants to develop land that includes an area of wetlands, as the term is defined by the Environmental Protection Agency. To fill or dredge this area requires
a. a contribution to the Natural Resources Defense Fund (NRDF) only.
b. a contribution to the NRDF and a permit from the U.S. Army Corps of Engineers (ACE).
c. a permit from the U.S. ACE only.
d. neither a contribution to the NRDF nor a permit from the U.S. ACE.
Q:
Oil Refining Company's plant emits hazardous air pollutants. Regarding these pollutants, the plant must use
a. the all-pollution elimination technology.
b. the best possible available technology.
c. the maximum achievable control technology.
d. the practically affordable standard technology.
Q:
Under the Clean Air Act, a regulated business can sell its pollution allowances to anyone. Delaware enacts the Equal Sale Act, under which profits received by a Delaware business on a sale of its allowances to a polluter in another state are forfeited to Delaware. Under the decision in Case 45.1,Clean Air Markets Group v. Pataki, a court is most likely to hold that
a. the Clean Air Act and the Equal Sale Act are mutually compatible.
b. the Clean Air Act and the Equal Sale Act are mutually exclusive.
c. the Clean Air Act preempts the Equal Sale Act.
d. the Equal Sale Act preempts the Clean Air Act.
Q:
The operations of Metal Industries, Inc., are major sources of air pollution. These operations must use
a. the absolutely cleanest air technology.
b. the best available filter technology.
c. the maximum achievable control technology.
d. the most affordable scrubbing technology.
Q:
The Farm Services Administration hires Good Works, Inc., to repave a parking lot. This does not require an environmental impact statement
a. because it does not affect the environment and it is not "federal" or "major."
b. only because it does not affect the environment.
c. only because it is not "federal."
d. only because it is not "major."
Q:
Rural Electric Company submits a bid to build a dam on federal land as part of a federal project. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Q:
Metro Power Corporation wants to build a nuclear power plant on private land, for which a federal permit is required. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Q:
New Town Construction, Inc., wants to build a parking ramp to connect to its New Town Mall, both of which are on private land. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Q:
Eagle Dry Cleaners, Inc., operates a chain of laundry establishments throughout the United States. The government entity that is most likely to be involved in regulating the chain's environmental impact is
a. Congress.
b. federal and state administrative agencies.
c. local chambers of commerce.
d. local police departments.
Q:
Livestock Corporation buys Mellow Orchard, and converts the operation to a hog farm. Because of the smell and other problems, Ned, who lives in an adjacent residential development, wants to file a suit against Livestock. Common-law tort theories on which Ned might base a suit include
a. breach of contract.
b. breach of the covenant of quiet enjoyment.
c. breach of warranty.
d. negligence.
Q:
Fact Pattern 45-1
Rock Mining Company operates a gravel pit next to Sid's residence. Sid files a suit against Rock, alleging that the pit is a nuisance and unreasonably interferes with Sid's enjoyment of his property.
Refer to Fact Pattern 45-1. The court is most likely to award Sid damages
a. if letting the pollution continue is equally as harmful as stopping it.
b. if letting the pollution continue is less harmful than stopping it.
c. if letting the pollution continue is more harmful than stopping it.
d. under no circumstances.
Q:
Fact Pattern 45-1
Rock Mining Company operates a gravel pit next to Sid's residence. Sid files a suit against Rock, alleging that the pit is a nuisance and unreasonably interferes with Sid's enjoyment of his property.
Refer to Fact Pattern 45-1. The court is most likely to award Sid an injunction
a. if letting the pollution continue is equally as harmful as stopping it.
b. if letting the pollution continue is less harmful than stopping it.
c. if letting the pollution continue is more harmful than stopping it.
d. under no circumstances.
Q:
Applied Industries, Inc., operates a plant next to Barb's property. Barb files a suit against Applied Industries, alleging that the plant is a nuisance. The court will most likely
a. balance the harm caused by pollution against the cost of stopping it.
b. deny relief to Barb on the ground that she does not have standing.
c. grant relief to Barb on the ground that the injury was foreseeable.
d. refer the case to the Environmental Protection Agency.
Q:
A party who generates only a portion of the hazardous waste disposed of at a particular site may be held liable only for that portion of the clean-up costs.
Q:
If the government undertakes clean-up operations at a waste disposal site, the parties who generated the waste are free of any clean-up costs.
Q:
Any organization planning to use a toxic chemical may be ordered to first determine its effect on human health and the environment.
Q:
Navigable waters include wetlands.
Q:
Those who violate the Clean Water Act may be subject to criminal penalties.
Q:
Those who violate the Clean Water Act may be subject to civil penalties.
Q:
Federal statutes provide the basis for issuing regulations to control water pollution.
Q:
Corporate officers may be subject to criminal penalties for violations of the Clean Air Act.
Q:
Performance standards for major sources of air pollution require use of the practically affordable control technology (or PACT).
Q:
Federal statutes provide the basis for issuing regulations to control air pollution emanating from mobile sources only.
Q:
Federal statutes provide the basis for issuing regulations to control air pollution emanating from stationary sources only.
Q:
The primary responsibility for implementing air-quality standards rests with the federal government.
Q:
If an agency decides that an environmental impact statement is not necessary, it must announce that decision and state the reasons.
Q:
The National Environmental Policy Act requires state and local agencies to prepare environmental impact statements.
Q:
An environmental impact statement is required for private business projects only.
Q:
Only private citizens can enforce most federal environmental laws.
Q:
Many states regulate the degree to which the environment may be polluted.
Q:
Anyone can sue to abate a "public" nuisance.
Q:
The only remedy in a common law action brought against a business firm for damage caused by pollution is an injunction.
Q:
Common law remedies against environmental pollution arose only recently.