M07 Quiz

A business, but not an individual person, can be deemed liable for monopolizing or attempting to monopolize trade or commerce in violation of the antitrust laws.

False

Creditors that use information from credit-reporting agencies cannot be held liable for violations of the Fair Credit Reporting Act.

False

Requiring users of a social media site to agree to certain terms and conditions to use the site is most likely an antitrust violation.

False

Securities can be sold before the effective date of the registration statement without restrictions.

False

Securities must be registered under the Securities Act of 1933 for the Securities Exchange Act of 1934 to apply.

False

The Lanham Act protects against the deceptive use of trademarks but does not cover false advertising claims.

False

The quality and safety of food may be important to consumers, but food labels that provide standard nutrition facts are a seller's option, not a requirement.

False

To avoid sanctions under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, scienter must exist.

False

To deem an agreement a per se violation of antitrust law, a court must determine whether the agreement actually constitutes a restraint on trade.

False

A deceptive ad for a product involving wrongful charges to consumers may result in an award of damages of a defendant's unjust gains and consumers' losses.

True

Any agreement among competitors to artificially fix prices or restrict output is a per se violation of Section 1 of the Sherman Act.

True

Anyone who has access to or receives inside information of a nonpublic nature and trades on it for personal gain can be liable under SEC Rule 10b-5.

True

Consumers benefit when producers work to develop better products that can be sold at lower prices to beat the competition.

True

Labels on fresh and frozen fruits and vegetables must indicate where the food originated so that consumers can know if the food was imported.

True

Most private, small-business, noninvestment company offers of securities are exempt from the registration requirements.

True

Providing investors with more information helps them make buying and selling decisions about securities.

True

The Telemarketing Sales Rule applies to any offer—domestic or foreign—made to consumers in the United States.

True

The definition of security in the Securities Act of 1933 includes interests that involve the right to buy a security on a national security exchange.

True

With respect to tainted foods, the focus of federal regulators has shifted from responding to incidents of contamination to preventing them.

True

Bio Med Corporation makes and sells Curative, the most prescribed name-brand pain-relief medication. Drugs Inc. has the potential to make a generic version of the same drug. Bio Med agrees to pay Drugs not to make or sell the generic. This agreement is most likely

a per se violation of the Sherman Act.

Jazz Inc. makes and markets music. The company wants to make an initial public offering of securities via the Internet. Most likely, this offering

can avoid high costs and complicated procedures.

Fabrication Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Fabrication is required to

disclose all essential information about the issuance of its securities.

Salsa Inc. complains to the Federal Trade Commission (FTC) about an ad broadcast by Taco Sauce Company, Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

draft a formal complaint.

Crowdfunding can be exempt from the registration requirements of the Securities Act of 1933 if shares are offered directly to investors.

false

Ewan, the chief executive officer of Furniture Inc., intentionally understates the amount of the firm's debts in information provided to investors as part of an issue of stock. Gary buys the stock and suffers a loss. Ewan may be subject to

government prosecution and a private investor's suit.

Brew House Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the Corporate World!' " The Federal Trade Commission would consider this ad

none of the choice

Direct Sales Corporation sells products to consumers over the phone, through the mail, and online. Under the Federal Trade Commission's Mail or Telephone Order Merchandise Rule, the firm may be liable for failing to

ship orders within the time promised in its ads

A false statement or unjustified claim about a competitor's products can result in liability for deceptive advertising.

true

Insider trading is prohibited because trading on the basis of inside information can give the trader an unfair advantage over the investing public.

true

The power to control the market price of a product is market power.

true