Chapter 6

The _____ Act establishes protection for trademarks. a. Lanham b. Hart-Scott-Rodino c. Sherman d. Clayton e. Robinson-Patman

a. Lanham

The Clayton Act: a. adds to the Sherman Act by prohibiting specific practices. b. establishes the Federal Trade Commission. c. amends the Robinson-Patman Act. d. requires large companies to notify the government of their intent to merge. e. amends Section 7 of the Celler-Kefauver Antimerger Act.

a. adds to the Sherman Act by prohibiting specific practices.

Burger Blaster claims on its website that it uses only the best beef in making its burgers, unlike Burger Barn, its largest competitor. Actually, Burger Blaster and Burger Barn buy exactly the same type of beef from the same wholesaler, and Burger Blaster's management knows it. As a result of Burger Blaster's claims, Burger Barn's sales fall. Burger Blaster is probably guilty of: a. deceitful diversion of patronage. b. bait advertising. c. deceptive advertising. d. puffery. e. deceptive sales practices.

a. deceitful diversion of patronage.

In addition to the Robinson-Patman Act, the _____ Act addresses the legality of price discrimination. a. Trade Discrimination b. Clayton c. Federal Trade Commission d. Sherman Antitrust e. Equal Rights

b. Clayton

A supplier sells two identical shipments of clothing to two different retailers at different prices. This is a clear violation of the _____ Act. a. Sherman Antitrust b. Robinson-Patman c. Federal Trade Commission d. Lanham e. Truth in Lending

b. Robinson-Patman

Identify the correct statement about the changing market conditions defense which buyers and sellers use that enable some types of price discrimination to occur. a. The burden of such a defense is with the buyer. b. This defense would attempt to justify the price differential based on the danger of imminent deterioration of perishable goods. c. The seller can attempt to show that its lower price to a purchaser was made in good faith in order to meet an equally low price of a competitor, provided that this "matched price" did actually exist and was lawful itself. d. Such a defense would attempt to show that a differential in price could be accounted for on the basis of differences in cost to the seller in the manufacture, sale, or delivery arising from differences in the method or quantities involved. e. This defense would attempt to justify the price differential based on the obsolescence of seasonal goods.

b. This defense would attempt to justify the price differential based on the danger of imminent deterioration of perishable goods.

The Equal Credit Opportunity Act: a. regulates the reporting and use of credit information; limits consumer liability for stolen credit cards to $50. b. prohibits discrimination in credit transactions because of gender, marital status, race, national origin, religion, age, or receipt of public assistance. c. empowers the FTC to determine rules concerning consumer warranties and provides for consumer access to means of redress, such as the "class action" suit. d. makes it a federal crime to defraud consumers through use of the mail. e. requires lenders to state the true costs of a credit transaction; established a National Commission on Consumer Finance.

b. prohibits discrimination in credit transactions because of gender, marital status, race, national origin, religion, age, or receipt of public assistance.

The _____ Act makes it a federal crime to defraud consumers through use of the mail. a. Sherman b. Federal Trace Comm ission c. Mail Fraud d. Automobile Information Disclosure e. Fair Packaging and Labeling

c. Mail Fraud

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices. a. Horizontal price fixing b. Vertical price fixing c. Price discrimination d. Deceptive pricing e. Predatory pricing

c. Price discrimination

_____ price fixing occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed upon price. a. Deceptive b. Horizontal c. Vertical d. Negotiated e. Coordinated

c. Vertical

Deceptive pricing occurs when retailers: a. state that their lower prices were made in good faith in order to meet an equally low price of a competitor. b. ban "fair trade" items from their store. c. advertise merchandise at an artificially low price and then try to add hidden, or extra, charges. d. tell lies about a competitor's price in an attempt to make a sale. e. sell merchandise above the manufacturer's cap.

c. advertise merchandise at an artificially low price and then try to add hidden, or extra, charges.

The three most common defenses available to suppliers charged with price discrimination are: a. changing market conditions, meeting competition, and good faith actions. b. ignorance of law, unprofitability of the supplier, and cost justification. c. cost justification, changing market conditions, and meeting competition. d. unprofitability of supplier, cost justification, and meeting competition. e. changing market conditions, meeting competition, and ignorance of law.

c. cost justification, changing market conditions, and meeting competition.

When all airlines agree to set fares at the same price, they are: a. engaging in vertical price fixing. b. violating fair trade laws. c. engaging in horizontal price fixing. d. violating the Federal Trade Commission Act. e. engaging in price discrimination.

c. engaging in horizontal price fixing.

The _____ Act prevents the marketing and selling of harmful toys and dangerous products. a. Sherman b. Federal Trade Commission c. Mail Fraud d. Child Safety e. Fair Packaging and Labeling

d. Child Safety

All of the pub owners in a small college town met and decided to charge $7.99 for a burger and beer during the school year. The pub owners may be in violation of the: a. Wheeler-Lea Act. b. Clayton Act. c. Federal Trade Commission Act. d. Sherman Antitrust Act. e. Hart-Scott-Rodino Act.

d. Sherman Antitrust Act.

The Celler-Kefauver Antimerger Act: a. prohibits unfair and deceptive acts and practices regardless of whether competition is injured. b. establishes protection for trademarks. c. defines price discrimination as unlawful (subject to certain defenses) and provides the FTC with the right to establish limits on quantity discounts. d. amends Section 7 of the Clayton Act by broadening the power to prevent corporate acquisitions where the acquisition may have a substantially adverse effect on competition. e. requires large companies to notify the government of their intent to merge.

d. amends Section 7 of the Clayton Act by broadening the power to prevent corporate acquisitions where the acquisition may have a substantially adverse effect on competition.

Resale price maintenance is another word for: a. horizontal price fixing. b. deceitful diversion of patronage. c. dual price setting. d. fair trade. e. predatory pricing.

d. fair trade.

The Sherman Antitrust Act sought to: a. restrict the amount of imports into the United States. b. eliminate price differences among competing suppliers. c. prevent unfair or deceptive advertising and selling practices within a marketing channel. d. prevent monopolies or conspiracies that are in restraint of trade. e. establish the first Federal "Fair Trade" Agency.

d. prevent monopolies or conspiracies that are in restraint of trade.

Classic Jeans has informed its retailers that they must either sell its new line of jeans for $39.99 or no longer be supplied by Classic Jeans. The retailers agree to this. Classic Jeans and its retailers are involved in: a. violation of the Wheeler-Lea Act. b. horizontal price fixing. c. violation of the Lanham Act. d. vertical price fixing. e. an attempt to maximize profits.

d. vertical price fixing.

The _____ Act requires companies to notify the government of their intent to merge. a. Sherman b. Clayton c. Federal Trade Commission d. Robinson-Patman e. Hart-Scott-Rodino

e. Hart-Scott-Rodino

Intel sold Pentium III computer processing chips to Gateway Computer for $12 per chip. Four days earlier, before the announcement of the new Pentium IV computer processor, Intel sold the Pentium III to Dell Computer for $22 per chip. Intel may attempt to justify its prices with a: a. meeting competition defense. b. cost justification defense. c. preferable customer defense. d. good faith defense. e. changing market conditions defense.

e. changing market conditions defense.

_____occurs when a retail chain charges different prices in different geographic areas in order to eliminate competition in those areas. a. vertical price fixing b. bait-and-switch pricing c. palm-off pricing d. horizontal price fixing e. predatory pricing

e. predatory pricing