Business Organizations Law
Final Exam Questions
Course Introduction
Business Organizations Law examines the legal principles and frameworks governing various forms of business entities, including partnerships, limited liability companies, and corporations. The course explores issues such as business formation, management structures, fiduciary duties of directors and officers, shareholder rights, corporate governance, and dissolution procedures. Students analyze statutory and case law to understand how legal rules affect the operation, regulation, and liability of business organizations in both domestic and international contexts. This foundational knowledge is essential for anyone interested in corporate law, entrepreneurship, or business management.
Recommended Textbook
The Legal Environment of Business Text and Cases 8th Edition by Frank B. Cross
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35 Chapters
1251 Verified Questions
1251 Flashcards
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Page 2
Chapter 1: Business and Its Legal Environment
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Sample Questions
Q1) Remedies in equity include injunctions and decrees of specific performance.
A)True
B)False
Answer: True
Q2) A state law that conflicts with the U.S.Constitution will be deemed unconstitutional.
A)True
B)False
Answer: True
Q3) At a prison in Ohio,inmate Steve recruits other inmates to play Towers & Trolls,a potentially violent,fantasy,role-playing game.Ryan,the prison's warden,confiscates the game materials and bans its play at the prison.Under the principles discussed in "A Sample Court Case," Singer v.Raemisch,Ryan most likely acted
A)in violation of Steve's rights under the First Amendment.
B)reasonably in taking the game materials but not in banning its play.
C)reasonably in banning the game but not in taking the materials.
D)reasonably in the circumstances and under the law.
Answer: D
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Chapter 2: The Court System
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Sample Questions
Q1) To prepare for a trial between Condo Development Corporation and Demo Construction Company,Condo's attorney places Demo's president under oath.An authorized court official makes a record of the attorney's questions and the officer's answers.This is
A)a cross examination.
B)a deposition.
C)e-evidence.
D)an interrogatory.
Answer: B
Q2) If a discovery request involves confidential business information,the scope of the request can be limited.
A)True
B)False
Answer: True
Q3) A trial commences with the plaintiff's attorney's direct examination of the first witness.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Alternative and Online Dispute Resolution
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Sample Questions
Q1) All-American Engineering,Inc. ,disputes the use of "all-american.com" as a domain name by All-American Export Company.For this dispute,the Internet Corporation for Assigned Names and Numbers (ICANN)operates
A)a blog for the public to comment on the issues and the parties.
B)an online arbitration system.
C)a record of all officially approved business names and numbers.
D)special courts in Washington,D.C. ,and other major cities.
Answer: B
Q2) Pretrial mediation is never mandatory.
A)True
B)False
Answer: False
Q3) The goal of mediation is to work out a resolution that benefits both sides. A)True
B)False
Answer: True
Q4) Parties can choose a particular state law to govern their arbitration agreement.
A)True
B)False
Answer: True
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Chapter 4: Ethics and Business Decision Making
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Sample Questions
Q1) Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take.
A)True
B)False
Q2) Peak & Vale Accountants provides other firms with accounting services.Questions of what is ethical involve the extent to which Peak & Vale has
A)a legal duty beyond those duties mandated by ethics.
B)an ethical duty beyond those duties mandated by law.
C)any duty beyond those mandated by both ethics and the law.
D)any duty when it is uncertain whether a legal duty exists.
Q3) Flexo Trucking Company transports hazardous waste.Garn is a Flexo driver,whom the company knows drives longer hours than federal regulations permit.One night,Garn exceeds the limit and has an accident.Spilled chemicals contaminate Hill City's water source,forcing the residents to move away.Flexo acted unethically because
A)Flexo showed reckless disregard for Hill City's residents and others.
B)Garn exceeded the federal time limit.
C)harm was caused by an unfortunate accident.
D)Hill City should have better protected its water source.
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Chapter 5: Constitutional Law
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Sample Questions
Q1) Wyoming enacts a statute that limits the liberty of all persons,including corporations,to broadcast "annoying" radio commercials.This may violate
A)equal protection.
B)procedural due process.
C)substantive due process.
D)the right to privacy.
Q2) The First Amendment does not protect corporate political speech.
A)True
B)False
Q3) Minnesota 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 state interests.
Q4) A law that discriminates based on gender must substantially relate to an important government objective to be valid.
A)True
B)False
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Chapter 6: Administrative Law
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Sample Questions
Q1) Every portion of every meeting of a federal administrative agency does not have to be open to public observation.
A)True
B)False
Q2) In most instances,an agency is not required to obtain a search warrant before a physical search for evidence is conducted.
A)True
B)False
Q3) A party can challenge an administrative regulation as so irrational as to be arbitrary and capricious.
A)True
B)False
Q4) Executive control over the Federal Communications Commission,and other agencies,may be exercised through a presidential veto of A)Congress's modifications of the agency's authority.
B)the agency's final rules.
C)the agency's final orders.
D)none of the choices.
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Page 8
Chapter 7: Criminal Law and Cyber Crime
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Sample Questions
Q1) Any crime that requires knowledge of computer technology for its investigation is a computer crime.
A)True
B)False
Q2) Ollie,an employee of Payroll Management Corporation,is arrested at work.A grand jury issues a formal charge against Ollie for larceny.This charge is
A)an arraignment.
B)an indictment.
C)an information.
D)an inquisition.
Q3) 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
Q4) Most cyber crimes are "new" crimes.
A)True
B)False
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Chapter 8: International Law in a Global Economy
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Sample Questions
Q1) Michael,a citizen of Ireland,and Nina,a citizen of the United States,enter into a contract.When Nina breaches the contract,Michael obtains an award of damages in an Irish court.He asks a U.S.court to enforce the award.The U.S.court defers to and enforces the Irish court's decree.This is
A)a travesty of justice.
B)the act of state doctrine.
C)the doctrine of sovereign immunity.
D)the principle of comity.
Q2) Legal systems around the globe are generally divided into common law and civil law systems.
A)True
B)False
Q3) Diners Corporation,a U.S.firm,signs a contract with Essen,A,G. ,a German firm,to give Essen the right to use Diners' trademark in restaurants in Germany.This is A)a distribution agreement.
B)a joint venture.
C)direct exporting.
D)licensing.
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Chapter 9: Contract Formation
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Sample Questions
Q1) An incidental third party beneficiary can sue to enforce the contract.
A)True
B)False
Q2) Forcing someone to enter into a contract through fear created by threats is duress.
A)True
B)False
Q3) Sylvia creates a profile for Today's Date,Inc. ,an online dating service.She exaggerates her appealing features and posts a photo of her friend Uva,whom Sylvia thinks is prettier.Enticed by the profile,Van subscribes to the service so that he can contact Sylvia.Van is most likely a victim of A)undue influence.
B)fraud.
C)mistake. D)nothing.
Q4) Under the mailbox rule,an acceptance takes effect at the time it is sent. A)True
B)False
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Chapter 10: Contract Performance,breach,and Remedies
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Sample Questions
Q1) A party who substantially performs his or her duties under a contract can enforce the contract against the other party.
A)True
B)False
Q2) A party who knowingly accepts defective performance of a contract waives the breach.
A)True
B)False
Q3) Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates.Lake Port's offer to perform,when Lake Port is ready,willing,able to do so,is
A)complete.
B)substantial.
C)tender.
D)tough.
Q4) Any breach excuses the nonbreaching party's duty to perform.
A)True
B)False
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Chapter 11: Sales,leases,and E-Contracts
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Sample Questions
Q1) Tune Products,Inc. ,offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,subject to certain specific delivery dates.Unlimited replies with a signed purchase order that reads,"Accept your offer for 100 I-appliances at $50 each.Must be delivered to our warehouse." Tune does not respond or deliver the goods.Unlimited files a suit for breach of contract,to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune.Can Unlimited recover Explain.
Q2) Woodgrain Products Company and Sylvia enter into a contract for a sale of lumber.Woodgrain knows the purpose for which Sylvia will use the goods.Under the UCC,an implied warranty of fitness of a particular purpose arises
A)if the buyer is relying on the seller to select suitable goods.
B)if the buyer asks for it.
C)if the seller is a merchant who deals in goods of the kind sold.
D)in conjunction with lease contracts,not sales contracts.
Q3) If the parties to a sales contract state that a certain remedy is exclusive,then it is the sole remedy.
A)True
B)False
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Chapter 12: Torts and Cyber Torts
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Sample Questions
Q1) A defense available in an action based on a negligence theory is that the plaintiff failed to prove one or more of the required elements.
A)True
B)False
Q2) Self-defense is a defense to a charge of assault.
A)True
B)False
Q3) The degree of care to be exercised in a situation can vary with a person's profession or occupation.
A)True
B)False
Q4) Bona fide competitive behavior can constitute wrongful interference with a contractual relationship.
A)True
B)False
Q5) Disparagement of property is another term for appropriation.
A)True
B)False
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Chapter 13: Strict Liability and Product Liability
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Sample Questions
Q1) Under the doctrine of strict liability,liability is imposed strictly according to fault.
A)True
B)False
Q2) A product liability action based on negligence does not require the plaintiff and the defendant to be in privity of contract.
A)True
B)False
Q3) Rhiana is shopping in Seth's Food Store when a bottle of Truly Bubbly Cola explodes,injuring her.Rhiana files a suit against Truly Bubbly,from whom she can recover only if she can show that she
A)did not assume the risk of the exploding bottle.
B)intended to buy the exploding bottle.
C)used due care in shopping in the store.
D)was injured due to a defect in the product.
Q4) A public policy underlying the imposition of strict product liability is that consumers should be protected against unsafe products.
A)True
B)False
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15
Chapter 14: Intellectual Property and Internet Law
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Sample Questions
Q1) A trade name cannot be registered with the federal government unless it is also a trademark or a service mark.
A)True
B)False
Q2) Copyright protection is automatic-registration is not required.
A)True
B)False
Q3) Max plots a new Batman adventure and carefully and skillfully imitates the art of DC Comics to create an authentic-looking Batman comic.Max is not affiliated with the owners of the copyright to Batman.Can Max publish the comic without infringing on the owners' copyright
Q4) Standard Corporation can not claim a trademark in the phrase "Quality Is Standard" if the phrase
A)has a secondary meaning.
B)is descriptive.
C)is generic.
D)is memorable.
Q5) State and federal governments provide for the registration of trademarks.
A)True
B)False
Page 16
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Chapter 15: Creditor-Debtor Relations and Bankruptcy
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Sample Questions
Q1) Creditors may contract with a debtor for discharge of the debtor's liquidated debts.
A)True
B)False
Q2) One of the primary effects of a discharge is to relieve the liability of a co-debtor.
A)True
B)False
Q3) The same principles that govern the filing of a liquidation petition apply to reorganization proceedings.
A)True
B)False
Q4) Federal law governs garnishment actions.
A)True
B)False
Q5) An artisan's lien is possessory.
A)True
B)False
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Chapter 16: Mortgages Foreclosures After the Recession
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Sample Questions
Q1) Main Street Lenders,Inc. ,attempts to coerce Nolan-who specializes in determining the value of real and personal property-into misstating the value of a property on which a loan is to be issued.This is
A)a legal and ethical-but morally arguable-financial ploy.
B)a legal-but unethical-business practice.
C)a necessary tactic to generate a profitable loan in today's market.
D)a violation of the law.
Q2) If a homeowner defaults,the lender has the right to foreclose on the mortgaged property.
A)True
B)False
Q3) Federal law encourages private lenders to modify mortgages so as to lower the monthly payments of borrowers who are in default.
A)True
B)False
Q4) A reverse mortgage starts as a fixed-rate mortgage and then converts into an adjustable-rate mortgage.
A)True
B)False
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Chapter 17: Sole Proprietorships, franchises, Partnerships
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Sample Questions
Q1) Inger is a franchisee of Honey Bear Restaurants,LLC Their contract gives Honey Bear the right to control virtually all aspects of Inger's operation,including the hiring of employees.One of the employees,Joris commits a tort against Kiley,one of Inger's customers.Kiley files a suit against Honey Bear.Honey Bear is most likely
A)liable because Honey Bear exercises control over Inger's operation.
B)liable because Kiley was Honey Bear's customer.
C)not liable because Inger is responsible for the employees.
D)not liable because Kiley was Inger's customer.
Q2) Dominique buys a franchise from Cheyenne Artisans,Inc.This provides Cheyenne with an outlet for the firm's goods,some of which Dominique is required to buy at an established price.In their agreement,Cheyenne may also specify
A)the franchisor's non-culpability for any breach of the agreement.
B)the franchise's business organizational form.
C)the retail prices at which Dominique must resell the goods she buys.
D)none of the choices.
Q3) A franchise is a contractual arrangement.
A)True
B)False
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Chapter 18: Limited Liability Companies and Limited Partnerships
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Sample Questions
Q1) Normally,a dissociated member of an limited liability company (LLC)has the right to force the LLC to dissolve.
A)True
B)False
Q2) B2B,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement does not cover.The dispute is governed by
A)the applicable state LLC statute.
B)the federal Uniform LLC Law.
C)the principles of partnership law.
D)the state corporation statute.
Q3) International Exports,L.P. ,is a limited partnership,with $100,000 in declared but unpaid profits.International's creditors include Friendly Credit Corporation for $5,000 and Gwen,one of International's limited partners,also for $5,000.When Harry,one of International's general partners,decides to retire,the other general partners vote to liquidate and dissolve the firm.The limited partners,who are not asked their opinions,want International to continue in business and file a suit against the general partners to compel this result.Can the court order International to continue If not,what is the priority of the distribution of International's assets on its dissolution
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Chapter 19: Corporations
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Sample Questions
Q1) To pierce the corporate veil means to ignore the corporate structure,exposing the shareholders to personal liability.
A)True
B)False
Q2) Heidi and Ian are directors and shareholders of Globe Software,Inc.Heidi's written authorization to Ian to vote Heidi's shares at a Globe shareholders' meeting is
A)a violation of the duty of loyalty.
B)a preemptive right.
C)a proxy.
D)a quorum.
Q3) Shareholders' meetings need not occur at any certain interval.
A)True
B)False
Q4) Every shareholder is entitled to examine specified corporate records.
A)True
B)False
Q5) Many qualifications are required for directors.
A)True
B)False
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Chapter 20: Agency
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Sample Questions
Q1) A principal whose identity is known by a third party with whom an agent contracts on the principal's behalf is a disclosed principal.
A)True
B)False
Q2) Jill introduces Kelly to her friends as "my associate." Kelly purports to act as Jill's agent in several business transactions with those friends.If Jill is liable for Kelly's actions,it will be under
A)the doctrine of estoppel.
B)the equal dignity rule.
C)the fiduciary principle.
D)the good faith statute.
Q3) Refer to Fact Pattern 20-1A.Liability to Shana for nonperformance of the contract may be imposed on
A)neither Ulani nor Thoroughbred Stallions.
B)Ulani and Thoroughbred Stallions.
C)Ulani only.
D)Thoroughbred Stallions only.
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Chapter 21: Employment Relationships
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Sample Questions
Q1) Myron is an employee of Nero.Either party can terminate the employment relationship at any time for any reason without liability.With respect to the employment-at-will doctrine,this is
A)an example of the doctrine.
B)an exception based on contract theory.
C)an exception based on public policy.
D)an exception based on tort theory.
Q2) In most states,employers who show an ability to pay claims do not need to buy workers' compensation insurance.
A)True
B)False
Q3) To be eligible for unemployment compensation,a worker must be willing and able to work.
A)True
B)False
Q4) Whistleblowing occurs when an employer signals the end of a work day by sounding a buzzer,ringing a bell,or otherwise "blowing the whistle "
A)True
B)False
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Chapter 22: Employment Discrimination
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Sample Questions
Q1) Origami Paper Products Corporation meets all of the requirements to be subject to the federal employment discrimination laws.These laws restrict the ability of employers to discriminate against workers on the basis of A)experience.
B)gender.
C)intelligence.
D)skill.
Q2) Eton files a suit in a federal district court against Florida,alleging employment discrimination under the Age Discrimination in Employment Act of 1967.The state asks the court to dismiss the suit.The court is most likely to rule that A)the state is immune from the suit.
B)the suit can proceed.
C)Eton is immune from any defense the state might offer.
D)the court is immune from such request.
Q3) Under the Age Discrimination in Employment Act of 1967,the plaintiff needs to show only that the employer was motivated in part by unlawful discrimination.
A)True
B)False
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24
Chapter 23: Immigratiion and Labor Law
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Sample Questions
Q1) The law guarantees union members higher wages than nonunion workers.
A)True
B)False
Q2) A union obtains authorization cards from a majority of workers to justify an election among the workers for unionization.
A)True
B)False
Q3) During a union election campaign,any statement by a union supporter to an employee regarding working conditions is considered a threat.
A)True
B)False
Q4) David's family came to the United States from Ukraine in 1895.Eva's family came to this country from Venezuela in 1995.Fiona's family came from Mexico in 2005.Current immigration laws are based on
A)a national origin quota system proportional to the 1890 census.
B)a racial quota system proportional to numbers updated periodically.
C)a system of sanctions against employers who hire illegal immigrants.
D)the exclusion of convicts and prostitutes.
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25
Chapter 24: Consumer Protection
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Sample Questions
Q1) A collection agency must include a validation notice whenever it initially contacts a debtor for payment of a debt.
A)True
B)False
Q2) In the ordinary course of business,Xtra Credit Company sells goods to Yvon and other consumers on credit under installment sales contracts that typically require at least one year of monthly payments.Xtra does not disclose all of the credit terms to its customers.This is most likely to result in
A)a cease-and-desist order.
B)a fine.
C)no sanctions.
D)rescission of the contracts.
Q3) A creditor has the right to garnish a debtor's wages unless the debt has gone unpaid for a prolonged period.
A)True
B)False
Q4) Merchants must ship orders within the time promised in their ads.
A)True
B)False
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Chapter 25: Environmental Law
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Sample Questions
Q1) The Environmental Protection Agency can regulate a substance that poses an imminent hazard but cannot prohibit the use of a substance altogether.
A)True
B)False
Q2) Fruitful Garden Company makes and sells pesticides.For the pesticides to remain on the market,the acceptable level of risk to people of developing cancer from exposure to the products is
A)one-in-a-hundred.
B)one-in-a-million.
C)one-in-a-thousand.
D)zero.
Q3) Congress enacts air quality legislation.To implement and enforce this law,as is typical of other environmental statutes and regulations,the federal government will most likely rely on
A)all levels of government.
B)local chambers of commerce.
C)local police departments.
D)polluters' self-monitoring.
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Chapter 26: Real Property Land-Use Control
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Sample Questions
Q1) In most states,the seller of a new house warrants that it is fit for habitation even if the deed does not include such a warranty.
A)True
B)False
Q2) County Zoning Commission classifies Dale's vacant land as single-family residential.This is not in accord with the general plan,which designates the area commercial.Surrounding parcels are zoned commercial.Under the equal protection of the Fourteenth Amendment,this is
A)an exercise of the state's police power.
B)a taking.
C)a zoning variance.
D)discriminatory.
Q3) A profit is the right to make limited use of another person's real property without taking anything from the property.
A)True
B)False
Q4) Most states allow the government to take private property for a private use.
A)True
B)False
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Chapter 27: Antitrust and Monopoly
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Sample Questions
Q1) Seaside Cannery,Inc. ,is one of many producers of canned seafood.Seaside refuses to sell its products to Port Harbor Restaurant Corporation.Under antitrust law,this refusal is most likely
A)a per se violation.
B)a violation if its competitors make similar deals.
C)a violation if it thereby acquires monopoly power.
D)not a violation.
Q2) In a situation involving a price-fixing agreement,normally each competitor is liable for the total amount of any damages.
A)True
B)False
Q3) Any agreement between firms that has the effect of reducing competition in the marketplace is a restraint of trade.
A)True
B)False
Q4) Only the U.S.Department of Justice can prosecute violations of all of the antitrust laws.
A)True
B)False
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Chapter 28: Antitrust and Restraints of Trade
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Q1) Finely Engineered Parts Corporation (FEPC)and Great Gears & Gauges,Inc.(3G),are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market.This market includes the states of California,Oregon,Washington,and Idaho.FEPC and 3G agree that FEPC will no longer sell in California and that 3G will no longer sell in Oregon,Washington,and Idaho.Have FEPC and 3G violated any antitrust law If so,which one Explain.If they had divided their market by type of customer rather than geographic are,would the result be the same Why or why not
Q2) XtraOrdinaire Inc.competes with Yowza! Company in the same market.Their merger would be
A)a horizontal merger.
B)an interlocking directorate.
C)a tying arrangement.
D)a vertical merger.
Q3) Mergers between firms that compete in the same market are vertical mergers.
A)True
B)False
Q4) In a concentrated industry,antitrust laws do not apply.
A)True
B)False
Page 30
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Chapter 29: Investor Protection and Corporate Governance
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Q1) Ridgeline Sports Gear,Inc. ,is required to register its securities under Section 12 of the Securities Exchange Act of 1934.Section 16(b)of the act covers
A)the declaration of dividends by Ridgeline's board of directors.
B)the later re-registration of Ridgeline's securities.
C)the short-swing activities of Ridgeline's insiders.
D)the solicitation of proxies from Ridgeline's shareholders.
Q2) In May,National Biotech Corporation generally advertises that it will make a $4 million offering of stock in June.National makes the offering as advertised and,ten days after the first sale,notifies the Securities and Exchange Commission (SEC).All buyers of the stock are given material information about the company,its business,and the stock.Before the end of the year,the offering is completely sold out.The buyers include forty unaccredited investors and fifty accredited investors.National does not register the offering.The SEC files a suit against National,seeking civil sanctions on the ground that this offering was not exempt from registration.National argues that the applicable exemption is Rule 505 of Regulation D of the Securities Act of 1933 and that because of this exemption,any resale of the stock is also exempt.Who is correct
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Chapter 30: Part I: The Foundations
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Q1) In a brief filed in Lea's suit against Mica in a state court,Neil,Lea's attorney,cites,Ole!
Cafe v.Pan Foods Corp. ,an unpublished opinion.With respect to the persuasiveness of unpublished opinions,most states
A)allow their courts to consider such opinions.
B)do not allow their courts to consider such opinions.
C)impose certain hierarchical rankings.
D)require their courts to consider such opinions.
Q2) Doug signs a contract to buy a cell phone and minutes from EquiTel Corporation.The contract provides that any dispute between the parties is subject to arbitration.When a dispute arises,Fabian agrees to serve as the arbitrator.Because Fabian would also like to resolve subsequent disputes,it is possible that he may be reluctant to rule against A)Doug.
B)EquiTel.
C)either party.
D)the common law.
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Chapter 31: Part II: The Public and International Environment
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Q1) Omni Oil,Inc. ,a Delaware firm,wants to use its corporate resources to influence the political process with respect to issues that do not relate to its business.Delaware attempts to block this use of resources.In a challenge to Delaware's action,under the First Amendment the most important question is whether
A)Omni and other corporations are protected by the free speech clause.
B)Omni should leverage political power through its economic skills.
C)Omni's speech is political in nature.
D)Omni's speech relates to an economic matter.
Q2) Pitter Pater Corporation is a U.S.firm that does business internationally.Among the ethical challenges facing Pitter Pater and other firms is the role of women because some countries
A)accept any professional role for women.
B)expect any professional role for women.
C)protect any professional role for women.
D)reject any professional role for women.
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33
Chapter 32: Part III: The Commercial Environment
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Q1) Bonnie contracts to deliver a crop of soybeans to Farmers Co-op.A tornado destroys the crop on her farm.The buyer insists that she deliver by acquiring soybeans on the open market.She claims that this is prohibitively expensive.Her best argument against enforcing the contract is
A)frustration of purpose.
B)objective impossibility of performance.
C)anticipatory repudiation.
D)commercial impracticability.
Q2) Sports Fit Company sponsors the "$100,000 Game" in which contestants compete in ten separate athletic events over a period of weeks.Sports Fit announces that the winner of each event will be awarded $5,000 with the "Ultimate Champion"-the winner of the most events-awarded $50,000.If the "$100,000 Game" is treated as a unilateral contract,Sports Fit 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 event prizes but not the grand prize.
D)reduce the amount of the grand prize but not the event prizes.
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Page 34
Chapter 33: Part IV: The Business Environment
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Q1) Kirby is a manager of Jumpstart Fitness LLC,a limited liability company.Jumpstart is formed in a state that imposes fiduciary duties on LLC managers.Kirby owes these duties to
A)Jumpstart's members.
B)Jumpstart's suppliers.
C)Jumpstart's customers.
D)none of the choices.
Q2) Logan is a director for Metal Masters Company.Ordinarily,Logan owes fiduciary duties only to A)himself.
B)Metal Masters's creditors.
C)Metal Masters's personnel.
D)Metal Masters's shareholders.
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35
Chapter 34: Part V: The Employment Environment
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Q1) AgriEquip Service & Supply,Inc. ,sends Merilyn an e-mail in which AgriEquip offers to employ her for certain hours and a specific amount of money over a limited period of time.She responds with a counteroffer that reduces the hours and increases the money.AgriEquip e-mails an acceptance.Merilyn performs,but AgriEquip refuses to pay.She files a suit against AgriEquip for breach of contract.The court is most likely to rule that the e-mail
A)showed only an agreement to agree.
B)was an agreement to the essential terms of an employment contract.
C)constituted an unenforceable,non-existent contract.
D)contained a contract but is unenforceable because it is electronic.
Q2) Paisley works for Rick's Air Conditioning & Heating Service.Reasons for holding Rick's liable under the doctrine of respondeat superior for Paisley's tort injuring Nikki do not include the employer's
A)ability to afford Nikki more effective relief.
B)ability to pay for Nikki's injury.
C)control over Paisley.
D)guilt or innocence.
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Page 36
Chapter 35: Part VI: The Regulatory Environment
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Q1) Pinpoint Marketing,Inc.(PMI),a credit-reporting agency,sells data about consumers to merchants and others.Consumers have some recourse if PMI
A)realizes a profit from the sales.
B)sells data about consumers who request to be "blacklisted."
C)does not report the data accurately.
D)does not tell consumers when the data is sold.
Q2) Cool Corporation makes energy-saving air conditioning units.Cool anticipates a change in the demand for its products as a consequence of climate change.One argument in favor of requiring Cool to disclose this information is that it could lead to
A)additional protections under the Sarbanes-Oxley Act of 2002.
B)an increase in the number of shareholder suits against competitors.
C)sound investment decisions by investors.
D)the conversion of Cool from publicly held to privately held.
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