Business Law
Exam Practice Tests
Course Introduction
Business Law is a foundational course that examines the legal principles and frameworks essential to conducting business in a modern economy. Topics covered include the nature and sources of law, contracts, agency, torts, employment law, forms of business organization, and the regulatory environment. The course also addresses contemporary issues such as intellectual property, e-commerce, and ethical considerations in business decision-making. By analyzing case studies and legal scenarios, students develop the ability to identify legal risks, understand compliance requirements, and make informed business decisions within the bounds of the law.
Recommended Textbook
The Legal Environment Today 7th Edition by
Roger LeRoy Miller
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27 Chapters
1810 Verified Questions
1810 Flashcards
Source URL: https://quizplus.com/study-set/3575
Page 2
Chapter 1: Business and Its Legal Environment
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72 Verified Questions
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Sample Questions
Q1) Beth is a victim of Carl's violation of a criminal law.Criminal law is concerned with A)the prosecution of private individuals by other private individuals.
B)the prosecution of public officials by private individuals.
C)the relief available when a person's rights are violated.
D)wrongs committed against the public as a whole.
Answer: D
Q2) The Federal Trade Commission (FTC)is a government agency that issues rules,orders,and decisions.The Georgia state legislature enacts statutes.The Jackson County Board and the Peach City Council enacts ordinances.Administrative law includes
A)all law that affects a business's operation.
B)the rules,orders,and decisions of the Federal Trade Commission.
C)statutes enacted by the Georgia state legislature.
D)ordinances created by the Jackson County Board and the city coun?cil of Peach City,Georgia.
Answer: B
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3
Chapter 1: A: Online Developments:
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36 Verified Questions
36 Flashcards
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Sample Questions
Q1) Lora initiates a sequence of events involving Mike that results in an injury to Nell.According to the New York Court of Appeals in Palsgraf v.Long Island Railroad Co.,if Lora was negligent with respect to Mike,Lora
A)is solely liable for Nell's injury.
B)is not liable for Nell's injury.
C)may be liable for Nell's injury-this is a separate issue.
D)shares liability with Mike for Nell's injury.
Answer: C
Q2) World Investment & Trading,Inc.(WIT),encourages its employees to build trust with its customers and other companies.Unfounded complaints and exaggerated charges leveled against WIT online would most likely be regarded by a court as A)an expression of fact.
B)a form of speech protected by the First Amendment.
C)an inappropriate online disclosure. D)libelous.
Answer: B
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4
Chapter 2: Ethics and Business Decision Making
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Sample Questions
Q1) An ethics program can clarify what a company considers to be unacceptable conduct.
A)True
B)False
Answer: True
Q2) A business organization and its actions cannot be based on trust.
A)True
B)False
Answer: False
Q3) Made4U Goods,Inc.,asks its employees,many of whom are members of the National Machinists Union,to apply the utilitarian theory of ethics.This theory does not require
A)a choice among alternatives to produce the maximum so?cietal utility.
B)a determination of whom an action will affect.
C)an assessment of the effects of alternatives on those affected.
D)the acquiring of the means of production by workers.
Answer: D
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Page 5
Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) A summary judgment is granted only if there is no genuine question of law.
A)True
B)False
Q2) Any judgment is enforceable.
A)True
B)False
Q3) Mandatory arbitration clauses in employment contracts are not enforceable.
A)True
B)False
Q4) In Restful Motel's suit against Sleepy Hotels,Inc.,the jury returns a verdict in Restful's favor.Sleepy files a motion stating that even if the evidence is viewed in the light most favorable to Restful,a reasonable jury should not have found in its favor.This is a motion for
A)a judgment in accordance with the verdict.
B)a judgment on the pleadings.
C)a new trial.
D)judgment n.o.v.
Q5) A judge instructs a jury as to the law that applies in a case.
A)True
B)False
6
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Chapter 4: Constitutional Authority to Regulate Business
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Sample Questions
Q1) California enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court to be
A)an unconstitutional restriction of speech.
B)constitutional under the First Amendment.
C)justified by the need to protect individual rights.
D)necessary to protect national interests.
Q2) The state legislature of Iowa enacts a transportation statute that impinges on interstate commerce.This statute will be
A)balanced in terms of Iowa's interest in regulating a certain matter against the burden placed on interstate commerce.
B)balanced in terms of the burden on Iowa against the merit and purpose of interstate commerce.
C)struck down.
D)upheld.
Q3) Equal protection means that the government must treat similarly situated individuals in a similar manner.
A)True
B)False
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Chapter 5: Torts,cyber Torts,and Strict Liabiity
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Sample Questions
Q1) The doctrine of negligence per se applies if an event causing harm does not normally occur in the absence of negligence.
A)True
B)False
Q2) Kai files a suit against Lana based on one of Lana's statements that Kai alleges is fraudulent.To give rise to fraud,the statement must be one of A)emotion.
B)fact.
C)illusion.
D)opinion.
Q3) Under the doctrine of comparative negligence,both the plaintiff's and the defendant's negligence are taken into consideration.
A)True
B)False
Q4) Under the "danger invites rescue" doctrine,a person who tries to rescue another individual from harm is liable for any injuries to the individual.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Sample Questions
Q1) Kino sees a DVD player on the porch of Lulu's house,takes the player to his home,and tells everyone he owns it.Maya,holding a knife,forces Nick to give her his boom box,and runs away with it.Ollie breaks into Pam's apartment,takes a computer,and leaves.Which of these acts are crimes,and what are the differences among them
Q2) Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading dock,puts the carton in his car,and drives away.This is A)burglary.
B)forgery.
C)larceny.
D)no crime.
Q3) A misdemeanor is a crime punishable only by a fine.
A)True
B)False
Q4) A defendant may be relieved of liability by showing that a criminal act was necessary to prevent an even greater harm.
A)True
B)False
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Chapter 7: International Law in a Global Economy
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Sample Questions
Q1) Congresswoman Pelosi and other politicians want to prohibit the import of certain agricultural products that pose a danger to domestic crops.With respect to these products' import,Congress can A)do nothing.
B)impose quotas,but not tariffs.
C)impose tariffs,but not quotas.
D)prohibit the imports.
Q2) Capital Diversified Corporation (CDC)owns assets in Dagistan,a new country in Asia.The government of Dagistan wants to nationalize all assets owned by foreign firms and investors.What can CDC do Can it at least obtain payment for the assets
Q3) Dumping is the exporting of environmentally polluting goods to a foreign market. A)True
B)False
Q4) The United States taxes each barrel of imported oil at a flat rate.This is
A)an antidumping duty.
B)a dumping duty.
C)a quota.
D)a tariff.
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Chapter 8: Intellectual Property and Internet Law
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Sample Questions
Q1) Joey reproduces Mina's copyrighted work without paying royalties.Joey is most likely excepted from liability for copyright infringement under the "fair use" doctrine if
A)Joey copies the entire work.
B)Joey distributes the copies freely to the public.
C)Joey's use has no effect on the market for Mina's work.
D)Joey's use is for a commercial purpose.
Q2) Because the Internet is vast,the unauthorized use of another's mark in a domain name is generally permissible.
A)True
B)False
Q3) A personal name is not protected under trademark law unless it acquires a secondary meaning.
A)True
B)False
Q4) A license permits the use of intellectual property for certain limited purposes. A)True
B)False
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Available
Chapter 8: A: Online Developments:
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Sample Questions
Q1) GPS Devices Inc.sponsors a "Finders Keepers!" contest in which Erwin and other entrants agree to race to certain locales to win small prizes and collect clues that lead to the "Grand Lost Treasure," which the first finder will be awarded.GPS reserves the right to cancel the contest or change its terms at any time.If Erwin challenges this reservation in court,the court will most likely hold that GPS can
A)cancel the contest or alter its terms at any time.
B)not modify the terms of the contest after it begins.
C)reduce the amount of the small prizes but not the grand prize.
D)reduce the amount of the grand prize but not the small prizes.
Q2) The Fair and Accurate Credit Transactions Act of 2003 prohibits merchants from priniting more than the last five digits of a credit card number or the expiration date on any receipt provided to the cardholder at the point of sale.According to recent court decisions,this requirement applies to
A)e-mailed receipts only.
B)paper receipts and paperless receipts of all kinds.
C)paper receipts only.
D)Web page screen shots and paper receipts only.
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Page 12
Chapter 9: Formation in Traditional and E-Contracts
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Sample Questions
Q1) Scot and Tiffany enter into an implied contract.The parties' conduct
A)defines the contract's terms.
B)finds the contract's facts.
C)terminates any unintended consequences.
D)undercuts any terms based on the facts.
Q2) The terms of a shrink-wrap agreement may be enforced in the same way as the terms of other contracts.
A)True
B)False
Q3) Kylie signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Lake Valley Medico,Inc.,in exchange for a bonus payment.The covenant is most likely enforceable by
A)both parties.
B)Kylie,but not Lake Valley.
C)Lake Valley,but not Kylie.
D)no one.
Q4) An offer must be practical to be effective.
A)True
B)False
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Chapter 10: Contract Performance,breach,and Remedies
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Sample Questions
Q1) Anything less than complete performance is a material breach of contract.
A)True
B)False
Q2) Anticipatory repudiation is treated as a material breach of a contract.
A)True
B)False
Q3) A breach of contract entitles the nonbreaching party to sue for damages.
A)True
B)False
Q4) Rescission advances the contracting parties to the position they would have been in if the contract had been fully performed.
A)True
B)False
Q5) An incidental beneficiary cannot sue the promisor directly for breach of the contract.
A)True
B)False
Q6) Performance can be accomplished by tender.
A)True
B)False
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Chapter 11: Sales,leases,and Product Liability
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Sample Questions
Q1) Gleaming Gem Corporation agrees to sell Jewelry Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is
A)Gleaming's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.
Q2) Country Style,Inc.,makes landscaping tools.Under the Restatement (Third)of Torts: Products Liability,Country could be liable for a warning defect if there is a foreseeable risk of harm posed by a product and A)the omission of a warning renders the product not reasonably safe.
B)there is a reasonable alternative design.
C)there is a lack of care in making of the product.
D)there is insufficient insurance coverage.
Q3) To constitute an express warranty,a representation must be in writing.
A)True
B)False
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Chapter 12: Creditor-Debtor Relations and Bankruptcy
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Sample Questions
Q1) Wilbur files a petition in bankruptcy for relief through an individual's repayment plan.Wilbur is granted a discharge.Debts that will not be discharged include claims for A)contributions to employee benefit plans.
B)money to be paid for services not rendered.
C)fraudulently incurred debt.
D)long overdue credit-card debt.
Q2) A guarantor can be required to pay an obligation only after the principal debtor defaults.
A)True
B)False
Q3) The holder of an artisan's lien can foreclose and sell the property subject to the lien to satisfy the debt.
A)True
B)False
Q4) Certain liquidation cases may be converted to repayment plan cases with the consent of the debtor.
A)True
B)False
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Page 16
Chapter 13: Mortgages Foreclosures After the Recession
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Sample Questions
Q1) A subprime mortgage is a loan made to a borrower who does not qualify for a standard mortgage.
A)True
B)False
Q2) Refer to Fact Pattern 13-2.Under federal law,disclosures with respect to one of 24-Hour Credit's loans must be provided
A)a certain number of days after the loan is finalized.
B)a certain number of days before the loan is finalized.
C)at the same time at which the loan is finalized.
D)at whatever time is most rational and appropriate.
Q3) A fixed-rate mortgage is a standard mortgage with a rate of interest that changes periodically.
A)True B)False
Q4) If a loan is not paid within a reasonable time after a notice of default,the borrower will receive a notice of sale.
A)True
B)False
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Chapter 14: Small Business Organizations
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Sample Questions
Q1) Corbin,a partner in Doctors Medical Clinic,applies for a loan with Evermore Bank allegedly on Doctors' behalf but without the authorization of the other partners.Evermore knows that Corbin is not authorized to take out the loan.Corbin defaults on the loan.Liability for its unpaid amount is imposed on
A)Corbin and Doctors,jointly.
B)Corbin only.
C)Doctors only.
D)Evermore only.
Q2) Felipe is a member of Great States Trucking LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is A)dissociation.
B)dissolution.
C)winding up.
D)wrongful.
Q3) A limited liability company must be managed by non-member managers.
A)True
B)False
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Chapter 14: A: Landmark in the Legal Environment:
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Sample Questions
Q1) Wood Works,LLC,is a limited liability company.Unless indicated otherwise on Wood Works's federal tax form,the firm will be taxed as
A)a corporation.
B)a partnership.
C)a sole proprietorship.
D)none of the above.
Q2) Eduard is a shareholder of Deutsche Internationale,a German firm.In Germany
A)most claims against firms are alleged in shareholders' derivative suits.
B)the law does not provide for derivative litigation.
C)derivative actions can only challenge directors' actions that shareholders could not legally ratify.
D)if a derivative action is unsuccessful,a firm can sue the plaintiff.
Q3) Vigor Fitness Corporation uses a Web site to provide downloadable information to prospective franchises.This online information is the equivalent of an offer that must comply with
A)no law.
B)the Franchise.com "Green Light" format.
C)the Federal Trade Commission's Franchise Rule.
D)the Uniform State Franchise Disclosure Act.
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Page 19
Chapter 15: Corporations
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Sample Questions
Q1) The first step in the incorporation process is to select a state in which to operate.
A)True
B)False
Q2) Many qualifications are required for directors.
A)True
B)False
Q3) Gelato Ice,Inc.,is incorporated in the state of New Jersey and is doing business in the state of New York.In New York,Gelato is properly referred to as
A)a domestic corporation.
B)a foreign corporation.
C)an alien corporation.
D)a de jure corporation.
Q4) Sophie and Tiny incorporate their beverage-container business as U-Twist Products,Inc.The first board of directors may be appointed by the firm's
A)board of directors.
B)incorporators.
C)officers.
D)shareholders.
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Page 20
Chapter 16: Agency
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Sample Questions
Q1) Bob,a salesperson at a Carpets Galore store,tells Dita,a customer,"Buy your carpet here,and I'll install it for half of what the store would charge." Dita buys the carpet,which Bob installs for half the store's price.Bob keeps the money.Bob has breached A)no duty.
B)the duty of loyalty.
C)the duty of notification.
D)the duty of obedience.
Q2) Before a principal can ratify a contract,the principal must know all of the material facts involved in the deal.
A)True
B)False
Q3) Clu serves in a representative capacity for Digger.Elmo is injured through Clu's negligence.Digger may be liable to Elmo if Clu's conduct occurred
A)due to a propensity Digger was not and could not have been aware of. B)during normal working hours.
C)in the course and scope of Clu's employment. D)outside the parties' employment relationship.
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Chapter 17: Employment,immigration,and Labor Law
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Sample Questions
Q1) Link and Meryl are employees of Natural Resources,Inc.(NRI).When Odel,the president of NRI,learns that Link and Meryl are active in union activities,he discharges them.Link and Meryl may bring an action against NRI under A)federal labor law.
B)federal or state unemployment law.
C)state workers' compensation law.
D)the employment at-will doctrine.
Q2) Pam is an administrative employee of Quality Assurance Company.Social Security contributions to help pay for Pam's loss of income on retirement are made by
A)neither Pam nor Quality Assurance.
B)Pam and Quality Assurance.
C)Pam only.
D)Quality Assurance only.
Q3) To recruit employees from other countries,an employer must first complete a verification process.
A)True
B)False
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22
Chapter 18: Employment Discrimination
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Sample Questions
Q1) Refer to Fact Pattern 18-1.To successfully defend itself in Fay's suit,GCC must show that Hank's statement was
A)a legitimate,nondiscriminatory reason for Fay's discharge.
B)not Fay's feeling about pranks at GCC.
C)only a pretext for Fay's dis?charge.
D)unofficial GCC policy.
Q2) Job requirements that relate to job performance cannot violate employment discrimination laws.
A)True
B)False
Q3) Research Statistics Corporation uses a merit system to pay its employees according to their job performance.Suki,a female,and Troy,a male,are Research employees with comparable jobs.Due to superior performance,Suki is paid more than Troy.This is
A)disparate-impact discrimination.
B)gender discrimination.
C)not discrimination.
D)reverse discrimination.
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23
Chapter 19: Powers and Functions of Administrative Agencies
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Sample Questions
Q1) Independent regulatory agencies include the cabinet departments of the executive branch.
A)True
B)False
Q2) The functions of the Social Security Administration,like those of other administrative agencies,include
A)adjudication.
B)declaration.
C)enunciation.
D)pronunciation.
Q3) The U.S.Social Security Administration is a federal agency.The Iowa Department of Social Services is a parallel state agency.If these agencies' actions conflict
A)the federal agency's actions will prevail.
B)the state agency's actions will prevail.
C)the two agencies' actions will be given equal weight.
D)the two agencies' actions will cancel each other.
Q4) Like statutory law,administrative law is created by legislatures.
A)True
B)False
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Chapter 20: Consumer Protection
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Sample Questions
Q1) Debt collectors who use a prohibited debt-collection tactic are exempt from liability if they can show that the debtor used misrepresentation in assuming the debt.
A)True
B)False
Q2) Milo buys an all-terrain-vehicle (ATV)from No-Limit Toys,Inc.,on credit but makes no payments on the account.Odell,the owner of No-Limit Toys,calls Milo at home on a Monday morning at three a.m.Odell represents himself as PayNow Collection Agency and demands payment "or else." The next day,Odell sends Milo notice that he has thirty days in which to request verification of the debt and that its payment will be suspended during that time,but that if he does not pay the full amount due within five business days,Odell will arrange for the "destruction of Milo's good credit rating." Which laws has Odell violated,if any,and in what ways?
Q3) Federal laws often provide more sweeping and significant protections for the consumer than state laws.
A)True
B)False
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Chapter 21: Protecting the Environment
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Q1) States may restrict a business's discharge of chemicals into the air or water.
A)True
B)False
Q2) Different standards for air quality apply to existing sources of pollution and major new sources.
A)True
B)False
Q3) Any point source emitting pollutants into water must have a permit.
A)True
B)False
Q4) A public authority-such as a state's attorney general-can sue to stop a "public" nuisance.
A)True
B)False
Q5) The Environmental Protection Agency sets minimum levels for pollutants in public water systems.
A)True
B)False
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Chapter 22: Real Property and Land-Use Control
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Q1) Property Management Corporation (PMC)owns several apartment buildings in two states.Regarding standards for maintenance of the buildings,PMC should consult
A)the applicable city ordinances and state statutes.
B)the previous owners.
C)the long-term tenants.
D)the Uniform Landlords' Maintenance Manual.
Q2) Land assigned by zoning laws for business activities is designated as being for commercial use.
A)True
B)False
Q3) A quitclaim deed warrants more than any other deed.
A)True
B)False
Q4) Mineral Products Corporation,which owns no land,has a right to mine the copper from Natural Resource Company's land.Mineral's right is
A)a leasehold estate.
B)a license.
C)an easement.
D)a profit.
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Chapter 23: Antitrust Law and Promoting Competition
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Sample Questions
Q1) The possession of monopoly power constitutes the offense of monopolization.
A)True
B)False
Q2) To violate antitrust law,an activity must involve two or more persons.
A)True
B)False
Q3) An agreement between firms operating at different levels in the manufacturing and distribution process cannot violate antitrust law.
A)True
B)False
Q4) Persons in foreign nations cannot be subject to U.S.antitrust law.
A)True
B)False
Q5) Size alone determines whether a firm is a monopoly.
A)True
B)False
Q6) Insurance companies are exempt antitrust laws whenever state regulation exists.
A)True
B)False
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Chapter 24: Investor Protection and Corporate Governance
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Q1) Only outsiders who would ordinarily be deemed fiduciaries of the corporations in whose stock they trade can be liable for insider trading.
A)True
B)False
Q2) Riley,an engineer for Shur-2-Gro Seed Corporation,learns that Shur-2-Gro has developed a corn hybrid to triple the output of any farm.Riley buys 20,000 shares of Shur-2-Gro stock.He tells Tess,who buys 15,000 shares.After the new hybrid is announced publicly,the price of Shur-2-Gro stock increases.Riley and Tess sell their shares for a profit.Under the Securities Exchange Act of 1934,liability may be imposed on A)none of these parties.
B)Riley and Tess only.
C)Riley only.
D)Riley,Shur-2-Gro,and Tess.
Q3) When Looking Glass Corporation wishes to issue certain securities,it must provide sufficient information for Alice,and other unsophisticated investors,to evaluate the financial risk involved.Specifically,the law imposes liability for making a false statement or omission that is "material." What sort of information would Alice consider material
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