Legal Aspects of Business Exam Practice Tests
Course Introduction
Legal Aspects of Business examines the fundamental principles of law as they apply to the commercial environment, exploring how legal frameworks influence business operations, decision-making, and strategy. The course covers a broad range of topics including contract law, company law, intellectual property rights, consumer protection, employment law, and regulatory compliance. Through analysis of real-world cases and statutory provisions, students gain an understanding of their legal rights and responsibilities, enabling them to identify and mitigate legal risks in business activities. Emphasis is placed on the practical implications of legal rules and the ethical considerations required for effective and responsible business management.
Recommended Textbook
Business Law Text and Cases Commercial Law for Accountants 14th Edition by Roger LeRoy Miller
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Chapter 1: Business Ethics
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Sample Questions
Q1) Dyan, the owner of Expert Restoration Services, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision
A) complies with religious principles.
B) affects the rights of others.
C) causes consequences that would follow if everyone acted the same way.
D) supports the right to make a profit.
Answer: B
Q2) The concept of corporate social responsibility is imposed on corporations by law.
A)True
B)False
Answer: False
Q3) Business owners' misbehavior has no negative consequences for their business. A)True
B)False
Answer: False
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Chapter 2: Small Businesses and Franchises
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Q1) State regulation of franchising is often aimed at protecting franchisees from unfair practices.
A)True
B)False
Answer: True
Q2) Champions Corporation licenses the trademarks to its products to Direct Marketing, Inc., to reproduce on caps, sweatshirts, and similar goods for sale. This is
A) a franchise.
B) none of the choices.
C) a business loan.
D) a sole proprietorship.
Answer: A
Q3) Diane organized, and owns and operates, Reliable Roofing, a construction outfit, in the simplest form of business organization. This is A) a limited partnership.
B) a limited liability company.
C) a corporation.
D) a sole proprietorship.
Answer: D
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Page 4
Chapter 3: All Forms of Partnerships
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Q1) Delany and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Delaney and Efron
A) file a certificate of limited partnership.
B) execute a partnership agreement.
C) accept their first client.
D) make their capital contributions.
Answer: A
Q2) A limited liability partnership must be formed in compliance with state statutes.
A)True
B)False
Answer: True
Q3) In a limited partnership, a general partner's dissociation from the firm normally will lead to dissolution unless all partners agree to continue the business.
A)True
B)False
Answer: True
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Chapter 4: Limited Liability Companies and Special
Business
Forms
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Q1) In most states, a limited liability company can have only a limited number of members.
A)True
B)False
Q2) Rogue Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rogue files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to
A) business trusts.
B) limited liability companies.
C) corporations.
D) partnerships.
Q3) Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.
A)True
B)False
Q4) A cooperative cannot be incorporated.
A)True
B)False
Page 6
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Chapter 5: Corporate Formation and Financing
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Q1) Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely
A) a corporation by estoppel.
B) a de facto corporation.
C) a de jure corporation.
D) ultra vires.
Q2) In many states, close corporations have more flexibility in determining their rules of operation.
A)True
B)False
Q3) A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes no attempt to incorporate.
A)True
B)False
Q4) A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit.
A)True
B)False
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Chapter 6: Corporate Directors, Officers, and Shareholders
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Q1) Beth and Curt form Day-to-Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with Day-to-Day's
A) board of directors.
B) incorporators.
C) officers.
D) shareholders.
Q2) Directors can delegate work to corporate officers and employees.
A)True
B)False
Q3) Faye and Grant are shareholders of Hearthside Hotels, Inc. As shareholders, they must approve
A) a merger.
B) a decision to pursue new business opportunities.
C) none of the choices.
D) a contract between management and labor.
Q4) As a general rule, shareholders are responsible for the daily management of a corporation.
A)True B)False
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Chapter 7: Securities Law and Corporate Governance
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Q1) Under the Sarbanes-Oxley Act of 2002, all members of a publicly traded corporation's audit committee must be outside directors.
A)True
B)False
Q2) Scienter is not required to impose criminal sanctions under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
A)True
B)False
Q3) Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must A) file a registration statement with the SEC.
B) issue the securities through an online registration site.
C) refrain from issuing the securities to unregistered investors.
D) register the securities with a national stock exchange.
Q4) The Securities and Exchange Commission has implemented no new regulations since the Securities Exchange Act.
A)True
B)False
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Chapter 8: Tort Law
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Q1) Bess, an accountant, distributes a handbill to her business clients and potential customers accusing her competitor Ciera of being a convicted thief. The statement is defamatory if
A) a recipient of a handbill repeats it.
B) Ciera suffers emotional distress.
C) the statement is true.
D) the statement is false.
Q2) Richard, an engineer, supervises the construction of a new mountainside roadway. When the road collapses in a landslide due to faulty grading, Richard is sued by motorists and hikers injured in the collapse. As a professional, Richard is held to the same standard of care as
A) ordinary persons.
B) other engineers.
C) other professionals, including doctors, dentists, and lawyers.
D) those injured in the collapse of the bridge.
Q3) Conversion is limited to theft.
A)True
B)False
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Chapter 9: Agency Formation and Duties
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Q1) Dewey is a corporate officer of Energy Corporation. Dewey serves in a representative capacity for the corporation's owners. With respect to binding the corporation to contracts, Dewey is
A) an agent and has the authority.
B) an employee and does not have the authority.
C) an independent contractor and does not have the authority.
D) not an agent, an employee, or an independent contractor but does have the authority.
Q2) The agent has the right to a safe working environment.
A)True
B)False
Q3) Investment Holdings Corporation hires Jeri, a business appraiser, to locate investment possibilities for Investment Holdings. Jeri learns of a salsa and hot sauce manufacturing company available for a reasonable price, but neglects to tell Investment Holdings. Most likely, Jeri
A) breached the agent's fiduciary duties to the principal.
B) did nothing wrong.
C) failed to take advantage of a business opportunity.
D) assumed that the information was confidential.
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Page 11
Chapter 10: Agency Liability and Termination
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Q1) Reliable Insurance Company employs Stuart as an agent. To terminate Stuart's authority, Reliable Insurance must notify
A) only third parties who are aware of the agency relationship.
B) the public generally.
C) Stuart and any third parties who are aware of the agency relationship.
D) Stuart only.
Q2) If a principal is disclosed, the agent may be liable to a third party for the principal's nonperformance of a contract.
A)True
B)False
Q3) Lena is a salesperson for Musical Instruments, Inc. She tells Nayda, a customer, that an instrument has a certain quality when, as Lena knows, it does not. In reliance, Nayda buys the instrument. Liable for this misrepresentation is
A) no one.
B) Lena.
C) Musical Instruments.
D) Nayda.
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Chapter 11: Employment, Immigration, and Labor Law
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Q1) Ginger is an employee of Haz-Mat, Inc. She refuses a transfer to a Haz-Mat department in which several employees suffered serious injuries from exposure to hazardous materials. Under the Occupational Safety and Health Act, Ginger may be A) entitled to higher wages for working in a hazardous department. B) reported to the Occupational Safety and Health Administration. C) entitled to protection from discharge. D) subject to discharge.
Q2) Livia takes temporary family leave from her job at Manufacturers Corporation to care for a new baby. On Livia's return from the leave, Manufacturers must A) restore Livia to her same position or a comparable position. B) reimburse Livia for her expenses while on leave. C) promote Livia to the status of a key employee. D) do nothing.
Q3) Only employers contribute under federal law to help pay for benefits that will partially make up for their employees' loss of income on retirement.
A)True
B)False
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Page 13
Chapter 12: Employment Discrimination
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Q1) In deciding what should be done to reasonably accommodate an individual with a disability, an employer should give primary consideration to the cost.
A)True
B)False
Q2) Intentional discrimination by an employer against an employee is known as disparate-impact discrimination.
A)True
B)False
Q3) Ellen and Fred work on the loading dock for Grange Storage. Ellen, who has a disability, requests a transfer, which would represent an accommodation for her disability. But when an opening occurs, Grange transfers Fred on the basis of seniority. In Ellen's suit against Grange for discrimination, most likely
A) Fred's seniority is a good defense.
B) Ellen's disability is a sufficient basis for relief.
C) Grange's action was a business necessity.
D) Grange's action was a reasonable accommodation.
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Page 14
Chapter 13: The Formation of Sales and Lease Contracts
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Q1) Rally Corporation enters into a contract to sell ski gear to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer.
Article 2 of the UCC applies to the sales transactions between
A) all of the buyers and sellers.
B) Rally and Sno-Sports only.
C) Sno-Sports and Tyra only.
D) Tyra and Upton only.
Q2) Refer to Fact Pattern 13-1.Growers Market contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Market is arguing that the court should take into account
A) the course of dealing.
B) the course of performance.
C) the usage of trade.
D) none of the choices.
Q3) Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.
A)True
B)False
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Chapter 14: Performance and Breach of Sales and Lease Contracts
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Q1) Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are delivered in a damaged condition. Speedy's
A) cannot reject the entire shipment.
B) must pay for all of the tires at the contract price.
C) may accept the shipment with a reduction in price.
D) must reject the entire shipment.
Q2) When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.
A)True
B)False
Q3) River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can
A) force the buyer to accept the rafts and pay for them.
B) recover the contract price but must hold the rafts for the buyer.
C) recover the contract price and keep the rafts.
D) recover the contract price but must destroy the rafts.
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Page 16
Chapter 15: Negotiable Instruments
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Q1) Bart, the owner of Clear Cut Corporation, signs an instrument that includes the phrase "payment for this note will be made from the proceeds of next year's timber sale." This instrument is
A) negotiable.
B) nonnegotiable, because payment can be made only out of a particular source.
C) nonnegotiable, because it states an express condition to payment.
D) nonnegotiable, because the reasons for the note are not clear on its face.
Q2) To finance the purchase of a house from Sander, Tobias signs an instrument promising to pay to "Uno Mortgage Company" $200,000 with interest in installments with the final payment due July 10, 2047. To be negotiable, this instrument must include the signature of
A) a non-party witness.
B) Sander or Sander's realtor.
C) Tobias.
D) Uno's chief financial officer.
Q3) Refer to Fact Pattern 15-1.Erin's check is most likely
A) a certificate of deposit.
B) an order to pay.
C) a promise to pay.
D) a promissory note.
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Chapter 16: Transferability and Holder in Due Course
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Q1) Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is
A) none of the choices.
B) an assignee.
C) an ordinary holder.
D) an ordinary holder in due course.
Q2) A holder takes an instrument for value if he or she inherits an instrument.
A)True
B)False
Q3) A holder takes an instrument for value by promising to perform in the future. A)True
B)False
Q4) Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know that Wren stole the check. Vicenzo is
A) an HDC.
B) not an HDC, because Wren did not acquire the check for value.
C) not an HDC, because Wren did not acquire the check in good faith.
D) not an HDC, because the check is a bearer instrument.
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Page 18
Chapter 17: Liability, Defenses, and Discharge
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Q1) Len signs a note "payable to the order of Account Collection Agency." Unless Len has a valid defense against payment, his liability on this note is
A) immediate.
B) imposed only after payment is demanded.
C) postponed until the note is dishonored by the payee.
D) suspended until payment is due.
Q2) Discharge in bankruptcy is no defense on any instrument regardless of the status of the holder.
A)True
B)False
Q3) Presentment warranties can be disclaimed only with respect to checks.
A)True
B)False
Q4) When there is a breach of an underlying contract for which an instrument was issued, the drawer of a check can order his or her bank to stop payment.
A)True
B)False
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19
Chapter 18: Banking in the Digital Age
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Q1) Any local check deposited must be available for withdrawal by check or as cash within one business day from the date of deposit.
A)True
B)False
Q2) Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First Bank. If the bank follows the usual banking practice in such a case, it will
A) cash the check.
B) consult Emma.
C) refuse to cash the check.
D) ask Dalton what he would prefer.
Q3) Shane issues a check drawn on Thrifty Bank to Farm Supply Store to pay for a rototiller. Later, Shane discovers a defect in the device and orders Thrifty to stop payment on the check. Shane does not renew the order, and the bank clears the check eight months later. The bank
A) must recredit Shane's account.
B) must obtain funds from Farm Supply to cover the check.
C) must substitute acceptable goods.
D) need not recredit Shane's account.
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Page 20
Chapter 19: Creditors Rights and Remedies
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Q1) Ronaldo's debt to Sofia is past due. Ronaldo obtains a judgment against Sofia to collect the debt, but Sofia will not pay. Ronaldo requests a writ of execution. The property that is seized under the writ of execution must be
A) in Ronaldo's possession.
B) in Sofia's possession.
C) in the possession of Sofia's employer or other third party.
D) within the court's geographic jurisdiction.
Q2) Refer to Fact Pattern 19-2.Robin will receive
A) $0.
B) $30,000.
C) $50,000.
D) $60,000.
Q3) Lenders Loan Company and Mortgage Service Corporation-Nadya's creditors-contract with Nadya for the discharge of her liquidated debts on payment of a lesser sum. This is
A) a composition agreement.
B) a subrogation.
C) a suretyship agreement.
D) in violation of most states' laws.
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Page 21
Chapter 20: Secured Transactions
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Q1) Angie borrows $20,000 from Credit Line Company using a stand of timber as collateral. To perfect its security interest, Credit Line must file its financing statement with A) the county clerk.
B) the mayor.
C) the state lumbermen's association.
D) the secretary of state.
Q2) A security agreement does not need to contain a description of the collateral. A)True
B)False
Q3) Metro Motors files a financing statement giving notice to the public that it has a secured interest in collateral belonging to Nate's Limousine Service, which is the debtor named in the statement. A uniform financing statement used in all states is
A) the UCC Financing Statement.
B) the UCC Collateral Form.
C) Form UCC-2.
D) none of the choices.
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22
Chapter 21: Bankruptcy Law
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Q1) A student loan is discharged underChapter 13 unless the creditor can show "undue hardship."
A)True
B)False
Q2) One goal of bankruptcy law is to ensure equitable treatment of creditors who are competing for a debtor's assets.
A)True B)False
Q3) Jill believes that she should file a plan for aChapter 13 discharge in bankruptcy. A court will confirm her bankruptcy plan if it provides for
A) the completion of all payments to all creditors within six years.
B) the payment of 100 percent of all obligations in full.
C) the surrender of all collateral to the creditors.
D) the turnover of the debtor's future income to the trustee.
Q4) Some student loans are dischargeable in aChapter 7 bankruptcy. A)True B)False
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Chapter 22: Professional Liability and Accountability
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Q1) Professionals are governed by the contracts they enter into with their clients.
A)True
B)False
Q2) Under federal law, communications between an accountant and his or her client are privileged.
A)True
B)False
Q3) Doug, an accountant, prepares for Econo Enterprise, Inc., a financial statement that omits a material fact. The statement is included in Econo's registration statement with the Securities and Exchange Commission. Felicia, who relies the statement, and Graham, who does not, each buy Econo stock. Under Section 11 of the Securities Act of 1933, Doug may be liable to
A) no one.
B) Felicia only.
C) Felicia and Graham.
D) Graham only.
Q4) Miriam is an accountant. Natalie is an attorney. Which professional is most restricted from disclosing her or his client's communication?
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Chapter 23: Administrative Agencies
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Q1) The Federal Trade Commission (FTC) orders Retail Empire Inc. to reveal certain information. Retail Empire complains to a court, arguing that the order is an abuse of the FTC's discretion. Like other agencies, the FTC can use a subpoena to A) compel a party to testify, but not to obtain documents. B) obtain any information except what a party refuses to reveal. C) harass an uncooperative business or individual. D) reveal regulatory violations.
Q2) Tim is a witness in a controversy involving the U.S. Bureau of Tobacco and Firearms. Tim can be compelled to appear before an administrative law judge if he is served with A) an order for specific performance. B) an executive order. C) a subpoena.
D) a search warrant.
Q3) Federal regulations take precedence over conflicting state regulations.
A)True
B)False
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Chapter 24: Consumer Law
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Q1) Under federal law, the calorie content of the food on a menu must be posted by Great Harvest, LLC, if the firm is
A) a restaurant chain with twenty or more locations.
B) a food distributor with twenty or more customers.
C) a food maker with twenty or more products.
D) a food producer with twenty or more acres.
Q2) Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on A) intelligence.
B) education.
C) income.
D) race.
Q3) Mac n' Cheese Company wants to make and market new processed pasta and sauce products. On each product's label, standard nutrition facts are A) prohibited.
B) required.
C) voluntary.
D) arbitrary.
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Chapter 25: Environmental Protection
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Q1) It is a violation of federal law to destroy or deface any labeling required on a pesticide or herbicide.
A)True
B)False
Q2) Loaf & Biscuit LLC operates a dough making and packaging plant-a "major source"-that emits hazardous air pollutants for which the Environmental Protection Agency has set maximum levels of emission. The plant does not use equipment to reduce its emissions. Under the Clean Air Act, this is most likely A) a violation.
B) not a violation because dough is not considered a pollutant.
C) not a violation because the plant does not use any equipment.
D) not a violation because the plant is not a mobile source.
Q3) Under the Clean Water Act, criminal penalties apply whether a violation was intentional or unintentional.
A)True
B)False
Q4) Many point sources emitting pollutants into water do not need a permit.
A)True
B)False
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Chapter 26: Antitrust Law
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Q1) A trade association practice or agreement that restrains trade is analyzed under the rule of reason.
A)True
B)False
Q2) To drive its competitors out of a certain geographic segment of its market, Drones, Inc., sets the prices of its products below cost for the buyers in that area. This is
A) price-fixing.
B) smart marketing.
C) predatory pricing.
D) price discrimination.
Q3) It is in society's interest to condemn every firm that acquires a position of power.
A)True
B)False
Q4) Any conspiracy-even if it occurs outside the United States-that has a substantial effect on U.S. commerce is within the reach of the Sherman Act.
A)True
B)False
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Chapter 27: Personal Property and Bailments
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Q1) Real property can not be turned into personal property by any method.
A)True
B)False
Q2) Mallory's brother Nate gives her a leather working kit. She uses it to make a saddle. Her acquisition of the saddle is by A) gift.
B) accession.
C) confusion.
D) production.
Q3) Oleg takes a PowerMade-brand rototiller to QuikFix Inc. for repairs. Lacking certain parts, QuikFix ships the rototiller to Repair & Parts Company. While in Repair & Parts's possession, the machine is damaged. QuikFix can recover for the damage from A) no one.
B) Oleg.
C) PowerMade.
D) Repair & Parts.
Q4) A bailment agreement must be express.
A)True
B)False
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Chapter 28: Real Property and Landlord-Tenant Law
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Q1) Investment Properties Inc. conveys an office building to Jim with a deed that makes the greatest number of warranties and provides the most extensive protection against defects of title. This deed is
A) a grant deed.
B) a quitclaim deed.
C) a special warranty deed.
D) a warranty deed.
Q2) Landscaping Company has the right to enter onto Martin's land and remove topsoil from certain acreage. This is
A) a fee simple absolute.
B) a license.
C) an easement.
D) a profit.
Q3) A periodic tenancy is created by a lease that does not specify how long it is to last, but does specify that rent is to be paid at certain intervals. A)True B)False
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Chapter 29: Intellectual Property
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Q1) Mace copies Nick's book, Off the Road, in its entirety and sells it to Parkland Books, Inc., without Nick's permission. Parkland publishes it under Mace's name. This is
A) copyright infringement.
B) fair use.
C) licensing.
D) protected expression.
Q2) A person can reproduce copyrighted material for purposes such as teaching, including multiple copies for classroom use, without paying royalties.
A)True
B)False
Q3) An applicant cannot register a trademark on the basis of an intention to use the mark in commerce.
A)True
B)False
Q4) Theft of confidential data by industrial espionage is a theft of trade secrets.
A)True
B)False
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Chapter 30: Insurance
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Sample Questions
Q1) A broker is an agent of an insurance company.
A)True
B)False
Q2) A person who obtains insurance from an insurance company's agent is usually protected the moment the premium is paid.
A)True
B)False
Q3) Energy Industries, Inc., obtains insurance policies with Fidelity Insurance, Inc., and Goodworth Insurance Company against the risk of loss of Energy's property. Each policy includes a multiple insurance clause. A fire partially destroys one of Energy's buildings. Energy can collect from Fidelity
A) all of the loss.
B) half of the loss.
C) its proportionate share of the loss to the total amount of insurance.
D) none of the loss.
Q4) A person can insure anything in which he or she has an insurable interest.
A)True
B)False
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Chapter 31: Wills and Trusts
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Q1) A trust created by a will to come into existence on the settlor's death is an irrevocable living trust.
A)True
B)False
Q2) Kim is asked to serve as a witness to Lian's will. To qualify, Kim must be
A) a collateral heir.
B) a lineal descendant.
C) at least eighteen years old.
D) mentally competent.
Q3) Per capita is a method of dividing an intestate share of an estate.
A)True
B)False
Q4) In his will, Bryson makes a gift of $12,000 to Curtis. This is
A) a general bequest.
B) a general devise.
C) a specific bequest.
D) a specific devise.
Q5) A gift of real estate by will is a bequest.
A)True
B)False
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Chapter 32: Digital Update:should Employees Have a Right of Disconnecting
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Q1) Security Patrols Inc. requires its employees to respond to work-related text messages delivered via their company-issued smartphones while on duty in the workplace and while off duty elsewhere. Security's employees might successfully sue their employer for
A) ownership of the company's smartphones.
B) a decrease in the quality of life.
C) a violation of the right to disconnect.
D) unpaid overtime.
Q2) Predictive analytics in the digital realm focuses on
A) predicting certain behavior based on certain data.
B) analyzing certain data to predict digital developments.
C) analyzing certain predictions to monitor certain results.
D) predicting certain digital data based on reasoned analysis.
Q3) Like other online businesses, Amazing.com collects and retains its customers' account numbers and other personal information. Keeping this data private will most likely
A) protect against liability for wrongful disclosure or misuse.
B) comply with federal and state laws that also cover offline businesses.
C) meet the standards of foreign countries' privacy laws.
D) all of the choices.
Page 34
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Chapter 33: Digital Update: Revenge Porn and Invasion of Privacy
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Q1) Kay, a driver for Lyft, files a suit against the firm to change her job classification and obtain better benefits. Lyft considers Kay and its other drivers to be
A) employees.
B) dependent contractors.
C) independent contractors.
D) none of the choices.
Q2) Machine Making Corporation requires its employees to punch out when they leave their workstations for personal breaks and punch in when they return. Under the Fair Labor Standards Act, Machine
A) must compensate its employees during their breaks.
B) need not compensate its employees during their breaks.
C) must record the breaks for review by the U.S. Department of Labor.
D) must record and report the breaks to the U.S. Department of Labor.
Q3) Under the Patient Protection and Affordable Care Act, a health insurance company can increase an employer's premium
A) if an employee files a claim.
B) as an employee gets older.
C) when the employer hires a woman.
D) none of the choices.
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Chapter 34: Digital Update: Taxing Web Purchases
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Q1) Apple Pay and other phone-based payment systems enable mobile devices to A) link from a digital wallet to another app within a single phone.
B) entail more security risks than carrying a physical wallet.
C) communicate wirelessly with point-of-sale systems.
D) work with existing magnetic-strip credit-card machines.
Q2) Fleet Feet, an online travel company, buys blocks of rooms from Grande Hotel, a hotel in Harbor City, at a wholesale rate. Fleet Feet resells the rooms to consumers at a retail rate. One recent effort by cities to collect taxes from e-commerce has focused on
A) hotels that sell blocks of rooms at wholesale rates.
B) non-resident consumers who reserve rooms in in-state hotels.
C) online travel companies.
D) the dire financial straits of the cities during the latest recession.
Q3) Olivia borrows $25,000 from the U.S. Department of Education to help pay for her education at Public University. She signs a note payable to DOE for the amount of the loan plus interest. The loan may be canceled if she is
A) a teacher in a certain school or subject area.
B) a military serviceperson.
C) a medical technician.
D) any of the choices.
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Page 36
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Sample Questions
Q1) To reduce the emission of greenhouse gases through the use of motor vehicle and transportation fuels, the federal government
A) imposes emission standards on cars and trucks.
B) encourages the use of fuel-efficient vehicles.
C) encourages the use of alternative fuels.
D) all of the choices.
Q2) The effects of climate change can be lessened by a reduction in greenhouse gases (GHGs). With this purpose in mind, GHG emission goals have been set by
A) about half a dozen states.
B) about a dozen states.
C) about half of the states.
D) nearly all of the states.
Q3) Eve is an attorney. With respect to client information, under the American Bar Association's Model Rules of Professional Conduct, Eve, like other attorneys
A) is required to guarantee that a breach of confidentiality will never occur.
B) has an ethical duty to safeguard the information.
C) does not need to be concerned with keeping the information secure.
D) does not own the data.
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Chapter 36: Digital Update:the Exploding World of Digital Property
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Sample Questions
Q1) Pay-to-Buy.com, Inc. obtains a patent on an online payment system. The patent is vaguely worded and overly broad. In evaluating the patent, a court is most likely to A) have difficulty, resulting in Pay-to-Buy being targeted by patent trolls.
B) apply the patent broadly.
C) issue a vaguely worded protection order.
D) hold that Pay-to-Buy's business practices are illegal.
Q2) Gwen starts Handy Crafts to advertise and sell ceramic pots, quilts, glass work, and so on. Later, Gwen marries Ivan, who creates and runs the firm's marketing. If Gwen and Ivan divorce, in most states the business will be considered
A) Gwen's separate property.
B) Ivan's separate property.
C) marital property.
D) neither separate nor marital property.
Q3) According to the United States Supreme Court,
A) Metro City can take a parking lot for a privately owned sports stadium.
B) all of the choices.
C) Laborville can condemn a vacant field for a private manufacturing plant.
D) Sleepyton can take residential property for a private corporate complex.
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