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ETH 321T WK 5 - APPLY: SUMMATIVE ASSESSMENT:
THE REGULATORY AND GLOBAL ENVIRONMENT
OF BUSINESS TEST Exam 2026-2027 BANK QUESTIONS
WITH DETAILED VERIFIED ANSWERS EXAM
QUESTIONS WILL COME FROM HERE (100% Latest
Already Graded A+
1. The Sherman Antitrust Act of 1890 was primarily designed to do
which of the following?
A) Regulate interstate commerce
B) Prohibit monopolies and restraints on trade
C) Establish the Federal Trade Commission
D) Legalize price-fixing among competitors
Answer: B) Prohibit monopolies and restraints on trade
Explanation: The Sherman Antitrust Act is the foundational U.S.
antitrust statute. Its core purpose is to combat anticompetitive
behavior, specifically monopolization and conspiracies that
unreasonably restrain trade, such as price-fixing or market division.
Option A is incorrect because the Sherman Act does not broadly
regulate commerce in the way that the Commerce Clause does; it
targets specific anticompetitive conduct. Option C is incorrect because
the FTC was established by the FTC Act of 1914. Option D is directly
contrary to the Act’s prohibitions.
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2. Under the Clayton Act of 1914, which of the following practices is
expressly prohibited if it substantially lessens competition?
A) Interlocking directorates
B) Price discrimination
C) Exclusive dealing contracts
D) All of the above
Answer: D) All of the above
Explanation: The Clayton Act was enacted to supplement the Sherman
Act by addressing specific practices that the Sherman Act did not clearly
cover. It explicitly prohibits price discrimination (Robinson-Patman Act
amendments), exclusive dealing contracts, tying arrangements, and
interlocking directorates when their effect is to substantially lessen
competition or tend to create a monopoly. Therefore, all options listed
are within the scope of the Clayton Act’s prohibitions.
3. The Federal Trade Commission Act of 1914 established the FTC and
granted it authority to do which of the following?
A) Enforce criminal penalties for antitrust violations
B) Prohibit "unfair methods of competition" and "unfair or deceptive
acts or practices"
C) Regulate the securities markets
D) Set maximum prices for consumer goods
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Answer: B) Prohibit "unfair methods of competition" and "unfair or
deceptive acts or practices"
Explanation: Section 5 of the FTC Act is a broad grant of authority that
empowers the FTC to police both anticompetitive conduct and consumer
protection issues. Option A is incorrect because the FTC is a civil, not
criminal, enforcement agency; criminal antitrust enforcement is handled
by the Department of Justice. Option C is incorrect because securities
markets are regulated by the SEC. Option D is incorrect because the FTC
does not set prices; it acts to prevent practices that distort market
pricing.
4. The "rule of reason" standard in antitrust law requires a court to do
which of the following?
A) Declare all restraints on trade per se illegal
B) Evaluate the procompetitive and anticompetitive effects of a
challenged practice
C) Apply a strict liability standard to all business mergers
D) Presume that any horizontal agreement is lawful
Answer: B) Evaluate the procompetitive and anticompetitive effects of a
challenged practice
Explanation: Under the rule of reason, courts analyze the actual impact
of a business practice on competition in a relevant market. They weigh
legitimate business justifications and procompetitive benefits against
the restraint's anticompetitive harms. Option A describes a per se rule,
not the rule of reason. Option C is incorrect because mergers are
evaluated under a different analytical framework, often the
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"substantially to lessen competition" standard. Option D is incorrect;
horizontal agreements are often subject to per se treatment, not a
presumption of lawfulness.
5. Which of the following is considered a per se violation of the
Sherman Act?
A) A joint venture to develop new technology
B) A horizontal agreement among competitors to fix prices
C) A vertical restraint on the maximum resale price
D) A merger between two small firms in a large market
Answer: B) A horizontal agreement among competitors to fix prices
Explanation: Price-fixing among horizontal competitors is one of the
classic per se violations. The courts have determined that such
agreements are so inherently anticompetitive that they are illegal
without any inquiry into their actual market effects or any possible
justifications. Option A is generally analyzed under the rule of reason.
Option C, maximum resale price maintenance, is now generally
analyzed under the rule of reason after the Supreme Court's decision in
Leegin. Option D is a merger, which is analyzed under a separate
statutory standard.
6. The Robinson-Patman Act addresses which type of anticompetitive
behavior?
A) Price discrimination that lessens competition
ETH 321T WK 5 - APPLY: SUMMATIVE ASSESSMENT:
THE REGULATORY AND GLOBAL ENVIRONMENT
OF BUSINESS TEST Exam 2026-2027 BANK QUESTIONS
WITH DETAILED VERIFIED ANSWERS EXAM
QUESTIONS WILL COME FROM HERE (100% Latest
Already Graded A+
1. The Sherman Antitrust Act of 1890 was primarily designed to do
which of the following?
A) Regulate interstate commerce
B) Prohibit monopolies and restraints on trade
C) Establish the Federal Trade Commission
D) Legalize price-fixing among competitors
Answer: B) Prohibit monopolies and restraints on trade
Explanation: The Sherman Antitrust Act is the foundational U.S.
antitrust statute. Its core purpose is to combat anticompetitive
behavior, specifically monopolization and conspiracies that
unreasonably restrain trade, such as price-fixing or market division.
Option A is incorrect because the Sherman Act does not broadly
regulate commerce in the way that the Commerce Clause does; it
targets specific anticompetitive conduct. Option C is incorrect because
the FTC was established by the FTC Act of 1914. Option D is directly
contrary to the Act’s prohibitions.
,2|Page
2. Under the Clayton Act of 1914, which of the following practices is
expressly prohibited if it substantially lessens competition?
A) Interlocking directorates
B) Price discrimination
C) Exclusive dealing contracts
D) All of the above
Answer: D) All of the above
Explanation: The Clayton Act was enacted to supplement the Sherman
Act by addressing specific practices that the Sherman Act did not clearly
cover. It explicitly prohibits price discrimination (Robinson-Patman Act
amendments), exclusive dealing contracts, tying arrangements, and
interlocking directorates when their effect is to substantially lessen
competition or tend to create a monopoly. Therefore, all options listed
are within the scope of the Clayton Act’s prohibitions.
3. The Federal Trade Commission Act of 1914 established the FTC and
granted it authority to do which of the following?
A) Enforce criminal penalties for antitrust violations
B) Prohibit "unfair methods of competition" and "unfair or deceptive
acts or practices"
C) Regulate the securities markets
D) Set maximum prices for consumer goods
,3|Page
Answer: B) Prohibit "unfair methods of competition" and "unfair or
deceptive acts or practices"
Explanation: Section 5 of the FTC Act is a broad grant of authority that
empowers the FTC to police both anticompetitive conduct and consumer
protection issues. Option A is incorrect because the FTC is a civil, not
criminal, enforcement agency; criminal antitrust enforcement is handled
by the Department of Justice. Option C is incorrect because securities
markets are regulated by the SEC. Option D is incorrect because the FTC
does not set prices; it acts to prevent practices that distort market
pricing.
4. The "rule of reason" standard in antitrust law requires a court to do
which of the following?
A) Declare all restraints on trade per se illegal
B) Evaluate the procompetitive and anticompetitive effects of a
challenged practice
C) Apply a strict liability standard to all business mergers
D) Presume that any horizontal agreement is lawful
Answer: B) Evaluate the procompetitive and anticompetitive effects of a
challenged practice
Explanation: Under the rule of reason, courts analyze the actual impact
of a business practice on competition in a relevant market. They weigh
legitimate business justifications and procompetitive benefits against
the restraint's anticompetitive harms. Option A describes a per se rule,
not the rule of reason. Option C is incorrect because mergers are
evaluated under a different analytical framework, often the
, 4|Page
"substantially to lessen competition" standard. Option D is incorrect;
horizontal agreements are often subject to per se treatment, not a
presumption of lawfulness.
5. Which of the following is considered a per se violation of the
Sherman Act?
A) A joint venture to develop new technology
B) A horizontal agreement among competitors to fix prices
C) A vertical restraint on the maximum resale price
D) A merger between two small firms in a large market
Answer: B) A horizontal agreement among competitors to fix prices
Explanation: Price-fixing among horizontal competitors is one of the
classic per se violations. The courts have determined that such
agreements are so inherently anticompetitive that they are illegal
without any inquiry into their actual market effects or any possible
justifications. Option A is generally analyzed under the rule of reason.
Option C, maximum resale price maintenance, is now generally
analyzed under the rule of reason after the Supreme Court's decision in
Leegin. Option D is a merger, which is analyzed under a separate
statutory standard.
6. The Robinson-Patman Act addresses which type of anticompetitive
behavior?
A) Price discrimination that lessens competition
