27. Disney Company owns the trademark rights and copyrights to its main characters and their stories, such a Mickey Mouse, Pluto, Mulan, Winnie the Pooh, Donald Duck, Pocahontas, Ratatouille, Snow White, WALL-E ("EVE!"), and others. Disney Company enters into a contract with Nike Inc., an athletic wear company that produces athetic shoes, shirts, hats, and other athletic wear, that authorizes Nike Inc. to place likenesses of these characters on Nike's athletic wear. This is an example of
B. Joint venture
C. Strategic alliance
E. Area franchise
13. Wal-Mart, Target and Costco, all discount retailers, decide to sell Shaquille O'Neal's, an NBA superstar, new instructional video "I can't shoot free throws, but you can!" They all agree that they will all sell the popular video for $49.99 (most videos of this type are priced at $19.95) and at no other price. This is an example of which of the following?
A. Division of markets
B. Tying Arrangement
C. Price fixing
D. Resale price maintenance
E. Group boycott
32. Which antitrust law makes price discrimination illegal?
A. Section 1 of the Sherman Act
B. Section 2 of the Sherman Act
C. Section 2 of the Clayton Act
D. Section 3 of the Clayton Act
E. Section 7 of the Clayton Act
14. In 2004, Tube bought a house on the beach in Malibu, California for $500,000 in order to be closer to the waves so he can surf more often. Tube paid $100,000 cash and borrowed $400,000 in a first loan from Wells Fargo Bank secured by his Malibu house. In 2009, Tube, because he is surfing all of the time and makes no money, defaults on the loan and files and qualifies for Chapter 7 bankruptcy. Because of the 2006-2012 Depression in California, Tube's house is only worth $200,000 at the time of default. Wells Fargo Bank receives the house in bankruptcy and sells the house for $200,000 to Patience. Which of the following is (are) true?
A. Wells Fargo Bank properly sold the house to Patience
B. Wells Fargo Bank becomes an unsecured creditor in the bankruptcy proceeding for $200,000
C. Wells Fargo Bank would be able to recover a deficiency judgment for $200,000 against Tube
D. A and B
E. A, B, and C
38. Dr. Phil and Dr. Kevorkian are doctors and member-owners of "Beverly Hills Liposuction, LLP," a limited liability partnership (LLP) engaged in the practice of medicine. The doctors provide liposuction surgery whereby they surgically remove excess fat from patients to make their patients look skinnier. While performing a liposuction surgical operation on J-Lo's convex butt, Dr. Phil sucks out too much fat and J-Lo becomes disfigured with a concave butt. Since Liposuction LLP has no money, J-Lo sues Dr. Phil and Dr. Kevorkian to recover monetary damages for her injuries. Which of the following statements is (are) true?
A. Dr. Phil is liable
B. Dr. Kevorkian is liable
C. Dr. Kevorkian is not liable
D. A and B
E. A and C
aD. A and B
cC. Section 2 of the Clayton Act
dE. A and C
eC. Price fixing
5 Multiple Choice Questions
E. None of the above
A. Hart-Scott Rodino Antitrust Act
E. No, because consumers have been notified that the McDonald's Corporation is not liable for the franchisee's negligent acts
A. You are not liable for violating Section 10(b)
5 True/False Questions
6. (from the book) Amazon.com and BarnesandNoble.com, the two largest online book retailers in the world, together lobby Congress to pass a new federal statute requiring online book retailers to offer a minimum of 3 million titles from their company web sites in order to remain in business. Smaller book retailers who want to sell books online sue Amazon.com and BarnesandNoble.com for allegedly violating Section 1 of the Sherman Act by engaging in an unlawful restraint of trade. What defense should the defendants raise?
A. Unilateral refusal to deal
B. Conscious parallelism
C. Noerr doctrine
D. Failing company doctrine
E. Small company doctrine → C. Noerr doctrine
19. Chanel, Prada, Louis Vuitton, and Gucci, all snotty, high-end and expensive fashion designers of fashion designer clothes, each individually decide that they will not sell their own snotty, high-end, and expensive fashion designer clothes to Wal-Mart, Target and Costco, all discount retailers, because the proletariat Wal-Mart, Target and Costco are not the suitable outlets to sell the designers' bourgeois snotty, high-end, and expensive fashion designer clothes. Wal-Mart, Target and Costco sue Chanel, Prada, Louise Vuitton, and Gucci for violating Section 1 of the Sherman Act by engaging in an unreasonable restraint of trade. Which of the following is (are) true?
A. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal group boycott
B. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal division of markets
C. Chanel, Prada, Louise Vuitton, and Gucci have engaged in legal conscious parallelism
D. Chanel, Prada, Louise Vuitton, and Gucci have engaged in an illegal price discrimination
E. A and D → A. Chapter 7
10. "Pinkberry" Incorporated is a company that operates a chain of franchised outlets that serve frozen yogurt, smoothies, and other desserts. The company has attained a cult-following of customers called "crackberries." Anyway, Pinkberry franchises franchisees to sell its products at small pink-colored outlets. Each Pinkberry franchisee is granted a specific territory. The Pinkberry Company provides each franchisee with the machines to make the yogurts, smoothies, and other food items, but all of these items are made at each location from yogurt, fruits, berries, and other items purchased by each franchisee. This is considered a ______________________ franchise.
B. Processing plant
E. Fu fu → E. No, because consumers have been notified that the McDonald's Corporation is not liable for the franchisee's negligent acts
5. Samantha, an MBA student, is a reporter for the Daily Trojan daily newspaper. She writes a daily newspaper article called "Stock Picks" wherein she recommends stocks to buy long or sell short. She always tells the truth in her articles. Samantha writes her articles the day before they are published in the Daily Trojan. Samantha is such a good analyst that she is 90% right with her recommendations and predictions. Because of her analytical ability Samantha's "Stock Picks" articles are widely read and followed by other MBAs, Wall Street investment bankers and securities professionals who follow Samantha's advice and buy and sell short the stocks she recommends, and the market always "moves" up or down based on Samantha stock picks. Samantha, however, has been investing in each company discussed in her Daily Trojan newspaper article the day before the article appears in the newspaper. The U.S. government wants to sue Samantha for a violation of Section 10(b). What theory should the government assert against Samantha?
A. Derivative theory
B. Tipper-Tippee theory
C. Misappropriation theory
D. Issuer theory
E. Respondeat superior theory → C. Misappropriation theory
16. To keep up with the times, Frog Inc. converts its snooty high-end expensive and saucy French restaurants to French fast food restaurants serving "American Fries." However, the Depression of 2006-2012 hits and no one wants to pay to eat at fast food French restaurants. Frog Inc. is heading toward bankruptcy. This time Frog Inc. wants to surrender (hey, they are French!) and just give up and quit. This time what type of bankruptcy should Frog Inc. file?
A. Chapter 7
B. Chapter 9
C. Chapter 11
D. Chapter 12
E. Chapter 13 → A. Chapter 7