Legal Environment of Business Practice Questions
Course Introduction
The Legal Environment of Business examines the framework of laws and regulations that influence business operations and decision-making. This course explores the fundamental principles of contract law, torts, agency, employment, and business organization, as well as the regulatory environment including government agencies and administrative law. Students will analyze legal issues impacting business transactions, understand the ethical and social responsibilities of businesses, and learn how to minimize legal risks while maximizing opportunities in a global marketplace. Through case studies and real-world examples, students gain practical skills for navigating the legal challenges commonly faced by businesses today.
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The Legal Environment of Business 13th Edition by Roger E. Meiners
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Chapter 1: Todays Business Environment: Law and Ethics
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327 Verified Questions
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Sample Questions
Q1) Statutory law is:
A) a law enacted by a legislative body
B) also known as the fundamental law of the nation
C) a form of common law
D) the separation of powers at the federal level
E) all of the other choices are correct
Answer: A
Q2) Misdemeanors are criminal offenses generally punishable by imprisonment for more than one year.
A)True
B)False
Answer: False
Q3) In addition to the legislature, the president or governor of a state is:
A) a source of compensation for injury
B) a source of funding
C) a source of judicial decisions
D) a source of moral codes
E) none of the other choices
Answer: E
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Page 3
Chapter 2: The Court Systems
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Sample Questions
Q1) Jane wants to sue Bob in a Virginia state court. Bob is a resident of Texas. Which of the following method may Jane use to get jurisdiction over the person of Bob?
A) have the Virginia police arrest Bob in Texas and take him to Virginia
B) Jane could disguise her voice and phone Bob, telling him he has won $10,000 and must pick up the money in Richmond, Virginia, then have him served in Richmond
C) Jane could have Bob served with a summons while he is driving through the state on his way to Maryland
D) Jane can have Bob served with a summons in Texas; he must appear in Virginia court
E) Jane cannot serve Bob with a summons because he is not a resident of Virginia
Answer: C
Q2) Most federal court of appeals cases are reviewed by the Supreme Court.
A)True
B)False
Answer: False
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4
Chapter 3: Trials and Resolving Disputes
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Sample Questions
Q1) An interlocutory injunction is usually in force until:
A) the defendant's attorney rescinds it
B) the defendant posts bail
C) the plaintiff withdraws the suit
D) the plaintiff's attorney rescinds it
E) none of the other choices are correct
Answer: A
Q2) The person who leads an arbitration proceeding is called an arbitrator.
A)True
B)False Answer: True
Q3) After pleadings, litigation enters the discovery stage.
A)True
B)False Answer: True
Q4) The Constitution guarantees a right to a jury trial in criminal cases.
A)True
B)False Answer: True
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Chapter 4: The Constitution: Focus on Application to Business
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Sample Questions
Q1) In Central Hudson Gas & Electric Corp., the Supreme Court held that the New York Public Service Commission could not prohibit utilities from spending money on ads for electricity even though they are regulated monopolies.
A)True
B)False
Q2) "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed" is the:
A) First Amendment of the U.S. Constitution
B) Second Amendment of the U.S. Constitution
C) Third Amendment of the U.S. Constitution
D) Fourth Amendment of the U.S. Constitution
E) Fifth Amendment of the U.S. Constitution
Q3) The most important part of the Constitution with respect to businesses is:
A) Article I, Section 9
B) Article I, Section 7
C) Article II, Section 8
D) Article II, Section 9
E) Article I, Section 8
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Chapter 5: Criminal Law and Business
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Sample Questions
Q1) In U.S. v. Allmendinger, involving an insurance scam run by Allmendinger and others, Allmendinger received a much longer prison sentence than a co-conspiriator, which he appealed. The appeals court held that a long prison sentence would be overturned due to Allmendinger's cooperation in the investigation of the crime.
A)True
B)False
Q2) When one commits a criminal act, that wrongful deed is:
A) mens rea
B) intentional negligence
C) res ipsa loquitor
D) actus reus
E) none of the other choices
Q3) The determination of what are crimes and the kinds of punishments are is limited by:
A) federal norms
B) state norms
C) international protocols
D) federal and state administrative rules
E) none of the choices are correct
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Chapter 6: Elements of Torts
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Sample Questions
Q1) You see someone stealing the highly prized hubcaps off your car. You have the right to protect your property by using:
A) deadly force "in case of res judicata"
B) "all force necessary" to subdue the thief
C) force reasonable under the circumstances, which may include killing the thief
D) force reasonable under the circumstances, which would include shooting the thief if you were concerned that the thief could be armed
E) none of the other choices
Q2) Which of the following would be least likely to be an invasion of privacy:
A) the use of a person's photograph without permission
B) publication of information about a person taken from public records
C) publication of information about a person that comes from private sources
D) publication of information about a person that places them in a false light to others
E) none of the other choices
Q3) A battery is an unlawful physical contact without consent.
A)True
B)False
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Chapter 7: Business Torts and Product Liability
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Sample Questions
Q1) A producer is relieved of strict liability in tort if it can show that it used all possible care to construct the product in question.
A)True
B)False
Q2) Experts estimate the annual cost of the tort system at:
A) one to two billion dollars
B) ten to twenty billion dollars
C) twenty to forty billion dollars
D) about a quarter trillion dollars
E) no estimates are available
Q3) Frustration over the difficulties of proving negligence led to the move in tort law from a negligence standard to a strict liability standard.
A)True
B)False
Q4) There are no defenses available in strict liability cases; manufacturers must pay whenever a consumer is injured.
A)True
B)False
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Chapter 8: Real and Personal Property
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Sample Questions
Q1) A binding obligation that goes with property when it is transferred to a new owner, who must abide by the obligation, is called a:
A) lien
B) covenant
C) mortgage
D) possessory
E) none of the other choices are correct
Q2) Which of the following is a right normally possessed by the holder of title to property:
A) right of possession of the property
B) the right of control of the property
C) the right to exclude others from use of the property
D) the right to enjoy the property in legal manners
E) all of the other specific choices are correct
Q3) A title could be "clouded" by which of the following:
A) a boundary dispute with a neighbor
B) tax liens placed against the property
C) liens imposed for work done on the property
D) uncertain claims of ownership by heirs to the property
E) all of the other specific choices are correct
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Page 10
Chapter 9: Intellectual Property
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Sample Questions
Q1) To register a copyright, you must:
A) pay a $35 fee
B) prove origin of creation of the work
C) receive certification from the Registrar of Copyrights
D) provide 12 copies of the work for the Copyright Office
E) you must do all of the other choices
Q2) Which of the following is an example of intangible property:
A) computers
B) furniture
C) land
D) patents
E) all of the other specific choices are correct
Q3) Which of the following is part of a notice of copyright:
A) the circle-C (©)
B) the year of first publication
C) the name of the copyright owner
D) all of the other specific choices are correct
E) none of the other specific choices are correct
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11
Chapter 10: Contracts
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Sample Questions
Q1) Fernando owes Lucia $8,000. They both realize he is unlikely to be able to repay that much, so Lucia says: "Pay me $5,000 and we'll call it good." Fernando pays the $5,000. This settlement is called:
A) preexisting duty
B) liquidated debt
C) unliquidated debt
D) accord and satisfaction
E) detrimental reliance
Q2) In general, if there is an error in a contract and if the other party should have known of the error:
A) the contract cannot be enforced to allow one party to profit from a simple error
B) the contract will still be enforced so long as both parties had the chance to read the contract
C) some states will still enforce the contract
D) the state Supreme Court will have to decide if the contract should be enforced
E) none of the other choices are correct
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Chapter 11: Domestic and International Sales
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Sample Questions
Q1) If a North Carolina firm contracts to buy toys from a seller in China, if there is a dispute:
A) North Carolina courts have jurisdiction because the buyer is from there
B) U.S. federal courts have jurisdiction because of diversity of citizenship
C) Chinese courts have jurisdiction because the seller is from there
D) the parties can choose in their contract where the dispute will be resolved
E) the U.N. Court of International Trade has jurisdiction, as it has in all such cases
Q2) If a good has been stolen and is then sold to an unsuspecting buyer:
A) the good title does not pass to the buyer
B) the good title passes to the buyer as long as he is unaware the good is stolen
C) the buyer must pay the rightful owner of the good
D) the buyer is liable for damages to the good and may have to serve jail time
E) the good title passes to the buyer whether or not he knows the good was stolen
Q3) China's Uniform Contract Law applied to foreign contracts, not domestic contracts.
A)True
B)False
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Chapter 12: Business Organizations
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Sample Questions
Q1) Gary and Sue start a consulting firm. They are co-owners of it and have joint control over its operation and the right to share in its profits. Their organization is most likely a: A) proprietorship
B) partnership
C) business trust
D) corporation
E) syndicate
Q2) Which of the following are not required to be in a certificate of limited partnership: A) the type or character of the business
B) the business positions to be held by each partner
C) the proportion of profits to be earned by each partner
D) the business positions to be held by each partner and the proportion of profits to be earned by each partner
E) the business positions to be held by each partner and the proportion of profits to be earned by each partner and the proportion of profits to be earned by each partner
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Chapter 13: Negotiable Instruments, Credit, and Bankruptcy
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Sample Questions
Q1) Goods that are movable at the time a security interest attaches, or begins are classified as:
A) tangible property
B) intangible property
C) movable property
D) insubstantial property
E) notable property
Q2) Under the UCC, a security interest in consumer goods perfects automatically when the consumer signs the agreement.
A)True
B)False
Q3) A guarantor is generally the same as:
A) the principal
B) the debtor
C) the surety
D) the grantor
E) the testator
Q4) Chapter 13 bankruptcy proceedings are used mainly by businesses.
A)True
B)False
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Chapter 14: Agency and the Employment Relationship
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Sample Questions
Q1) When an agency is terminated:
A) the agent's authority to act for the principal does not end
B) the agent may not work for someone who is in competition with the principal
C) the agent's authority to act for the principal is reduced to very limited conditions
D) the agent may never work with the principal again
E) none of the other choices are correct
Q2) Juan and Marie enter into an oral agreement that Marie will sell Juan's crusty herb garlic bread to gourmet food stores in the area. This works until Juan gets sick and no longer makes his bread. Marie is furious that Juan is unable to supply her with the popular bread and sues him for lost profits. A court is likely to rule:
A) Juan cannot abandon the agency relationship he established with Marie
B) Marie may not be fired because she and Juan had a contract of employment
C) Juan should pay Marie damages for reducing her income
D) Juan cannot abandon the agency relationship he established with Marie and Juan should pay Marie damages for reducing her income
E) none of the other choices
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Chapter 15: Employment and Labor Regulations
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Sample Questions
Q1) In Chicago Teachers Union, regarding agency fees paid by nonunion workers to unions at unionized workplaces, the Supreme Court held that which of the following requirements must be fulfilled with regard to agency fees paid by nonunion workers:
A) an adequate explanation of the basis for the fee
B) a reasonably prompt explanation of the basis for the fee
C) an opportunity to challenge the fee before an impartial decision maker
D) an escrow account for the amounts in dispute while challenges are pending
E) all of the other specific choices are correct
Q2) Under the Family and Medical Leave Act, employees returning from leave must be given at least a "comparable position" but not the same job as before.
A)True
B)False
Q3) Some supporters argue that the minimum wage laws are necessary to ensure that people are able to buy necessities of life.
A)True
B)False
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17
Chapter 16: Employment Discrimination
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Sample Questions
Q1) About 36% of discrimination charges filed every year are based on discrimination for:
A) sex
B) race
C) experience
D) age
E) religion
Q2) When the effect of a hiring or promotion decision is intentionally discriminatory it is called:
A) mixed motive qualification
B) McDonnell-Douglas discrimination
C) disparate impact
D) pretextual treatment
E) none of the other choices
Q3) The Equal Pay Act:
A) prohibits pay discrimination on the basis of age
B) prohibits pay discrimination on the basis of sexual orientation
C) prohibits pay discrimination on the basis of seniority
D) encourages pay discrimination on the basis of nationality
E) prohibits pay discrimination on the basis of sex
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Page 18
Chapter 17: The Regulatory Process
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Sample Questions
Q1) In a case involving judicial review of an administrative agency's decision, the court's ____ determines how far it can go in examining the action.
A) judicial scope
B) substantive scope
C) ability to review
D) extent of review
E) none of the other choices are correct
Q2) The administrative agency equivalent to a court trial is:
A) a commissioner's hearing
B) a Congressional review
C) a rulemaking
D) an adjudicatory hearing
E) none of the other choices
Q3) Which of the following is a benefit of agencies using informal procedures:
A) informal procedures generally require less time
B) informal procedures generally cost less
C) informal procedures are more thorough
D) both a and b are correct
E) none of the other choices are correct
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Page 19
Chapter 18: Securities Regulation
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Sample Questions
Q1) Which of the following is a self-regulating organization that the SEC has the power to monitor:
A) the New York Stock Exchange
B) the American Stock Exchange
C) the NASDAQ
D) all of the other specific choices are correct
E) none of the other specific choices are correct
Q2) In a suit for fraud against the issuer of a security, which element would not have to be shown?
A) a security was involved
B) there was a misleading statement or material omission
C) bad information was contained in an SEC filing
D) all elements must be shown
E) none of these elements are necessary, but make for a stronger case
Q3) An open-end investment company is usually called a mutual fund.
A)True
B)False
Q4) Debt instruments, such as bonds, may not be sold for a commission.
A)True
B)False
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Chapter 19: Consumer Protection
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Sample Questions
Q1) Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:
A) sodium
B) niacin
C) vitamin A
D) vitamin C
E) none of the other choices are correct
Q2) The Consumer Leasing Act applies to consumer leases for all of the following except a lease:
A) of living room furniture for 18 months
B) of a car for two years
C) of a computer for a year
D) of a big-screen television for six months
E) all of the other choices are covered if for personal use
Q3) Consumers who borrow money in the U.S. have, in general, far more rights under the law than is true in other wealthy nations such as Germany and the U.K.
A)True
B)False
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Chapter 20: Antitrust Law
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Sample Questions
Q1) In Dr. Miles Medical Co. v. John D. Park, the Supreme Court ruled that a supplier cannot control the price at which a product is resold by a retailer.
A)True
B)False
Q2) The Sherman Act expressly holds illegal:
A) a business that grows so large that it dominates a market
B) discrimination in prices between different purchasers of commodities of like grade and quality
C) a business that raises its prices, where the effect may be to lessen competition
D) all of the other specific choices
E) none of the other choices
Q3) Resale price maintenance is usually favored by:
A) mass retailers
B) producers of well-known products
C) small retailers
D) both b and c
E) choices a, b, and c are all correct
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Chapter 21: Environmental Law
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Sample Questions
Q1) New plants that discharge pollutants into the waters of the U.S. are subject to:
A) new source performance standards
B) non-point source reduction technology
C) best remedial technology
D) least cost pollution technology
E) none of the other choices
Q2) States are responsible for designating the intended use of all surface water.
A)True
B)False
Q3) Which of the following statutes concern the consequences of groundwater pollution from agricultural fertilizers and sprays:
A) the Safe Drinking Water Act
B) the Safe Swimming Water Act
C) the Clear Seas and Skies Act
D) the Polluted Water Act
E) all of the other choices are correct
Q4) A trespass occurs when there is a non-physical invasion of someone's personal belongings.
A)True
B)False
Page 23
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Chapter 22: The International Legal Environment of Business
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Sample Questions
Q1) The U.S. uses a Harmonized Tariff Schedule that:
A) completed a 25-year formal governmental transfer from specific to ad valorem tariffs on all products
B) adopted the GATT tariff schedules set forth by the Community of Nations Accord signed in Paris in 1982
C) bring U.S. tariffs in line with tariffs imposed on goods imported into foreign trade zones and duty-free ports
D) provide for specific exemptions from WTO tariff schedules
E) none of the other choices
Q2) The sale of restricted goods, such as military equipment, applies to sales from the U.S. to other nations, but cannot control resale of the goods once outside of the U.S.
A)True
B)False
Q3) Unlawful takings of property by foreign governments are called confiscations.
A)True
B)False
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