BUSI 2301 FINAL EXAM QUESTIONS WITH COMPLETE UPDATED ANSWERS GRADE A - $20.49   Add to cart

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BUSI 2301 FINAL EXAM QUESTIONS WITH COMPLETE UPDATED ANSWERS GRADE A

BUSI 2301 FINAL EXAM 1. If a provision in the Florida state constitution conflicts with a provision in the U.S. Constitution A) neither provision applies. B) the provisions are balanced to reach a compromise. C) the state constitution takes precedence. D) the U.S. Constitution takes precedence. Points Earned: 1.0/1.0 2. In a suit against Kit, Leo obtains specific performance. This is A) an equitable remedy and a remedy at law B) an equitable remedy only. C) a remedy at law only. D) neither an equitable remedy nor a remedy at law. Points Earned: 1.0/1.0 3. Holly is a state court judge. Ilsa appears in a case in Holly’s court, claiming that Jim breached a contract. As in most state courts, Holly may A) award damages, cancel a contract, or direct a party to do or not to do an act. B) award damages only. C) cancel a contract only. D) direct a party to do or not to do a particular act only. Points Earned: 1.0/1.0 4. Great Internet, Inc. (GII), is an Internet service provider. GII’s tech support employees are on strike. Six of the workers are blocking GII’s door. To get them away from the door, GII should obtain A) a decree of specific performance. B) an award of damages. C) an injunction. D) a rescission. Points Earned: 1.0/1.0 5. In a suit against Clem, Dona obtains the cancellation of a contractual obligation. This is A) an injunction. B) damages. C) rescission. D) specific performance. Points Earned: 1.0/1.0 6. Jo files a suit against Lara in a Missouri state court. Lara’s only connection to Missouri is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the issue is whether Lara, through her ad, has A) a commercial cyber presence in Missouri. B) conducted substantial business with Missouri residents. C) general maximum contact with Missouri. D) solicited virtual business in Missouri. Points Earned: 1.0/1.0 7. Inferior Company sells products that are poorly made. Jock, who has never bought an Inferior product, files a suit against Inferior, alleging that its products are defective. The firm’s best ground for dismissal of the suit is that Jock does not have A) certiorari. B) jurisdiction. C) standing. D) sufficient minimum contacts. Points Earned: 1.0/1.0 8. Sid files a suit against Tina. Before going to trial, the parties, with their attorneys, meet to try to resolve their dispute. A third party helps them to reach an agreement. This is A) arbitration. B) litigation. C) mediation. D) negotiation. Points Earned: 1.0/1.0 9. Jen files a suit against Kyle. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge but who renders a legally binding decision. This is A) arbitration. B) litigation. C) mediation. D) negotiation. Points Earned: 1.0/1.0 10.Louis—larger and stronger than Mica—threatens to hit Mica before hitting and injuring him. Mica files a suit against Louis for assault and battery. Mica will most likely recover for A) assault and battery. B) assault but not battery. C) battery but not assault. D) neither assault nor battery. 11.Jaqy distributes a handbill among her neighbors accusing one of them—Ked—of being a convicted sex offender. The statement is defamatory only if A) a neighbor repeats it. B) Ked suffers emotional distress. C) the statement is true. D) the statement is false. Points Earned: 1.0/1.0 Correct Answer(s): D 12.Phil invites Quinn onto his land. Quinn commits trespass if A) Phil asks Quinn to leave and Quinn refuses. B) Quinn enters the property in the evening. C) Quinn makes disparaging remarks about Phil to third parties. D) the property is damaged during the visit. Points Earned: 1.0/1.0 13.Lon trespasses on Mega Corporation’s property. Through the use of reasonable force, Mega’s security guard Ned detains Lon until the police arrive. Mega is liable for A) assault and battery. B) false imprisonment. C) intentional infliction of emotional distress. D) none of the choices. Points Earned: 1.0/1.0 14.Dian, a clerk at an Entertainment Unlimited store, takes a DVD player from the store without permission. Dian is liable for A) appropriation. B) conversion. C) disparagement of property. D) wrongful interference with a business relationship. Points Earned: 1.0/1.0 Correct Answer(s): B 15.Rock pushes Sylvia to the ground, grabbing her purse as she falls. The use of force or fear is required for this act to constitute A) burglary. B) forgery. C) larceny. D) robbery. Points Earned: 1.0/1.0 16.Val, the owner of Wild Wheels, a bicycle store, trusts Xavier to manage the store’s daily cash flow. One night, without Val’s knowledge or consent, Xavier takes and keeps $500 from the receipts. This is most likely A) embezzlement. B) larceny. C) robbery. D) no crime. Points Earned: 1.0/1.0 Correct Answer(s): A 17.Yvon is charged with the crime of theft for taking Zack’s briefcase, which Yvon mistakenly thought was hers. A mistake of fact is a defense A) if the fact was not reasonably made known to the public. B) if the mistake negates the mental state necessary to commit a crime. C) if the perpetrator was intoxicated. D) under any circumstances. Points Earned: 1.0/1.0 18.Ethan, the president of Financial Investments, Inc. (FII), and Gina, FII’s account¬ant, are charged with a crime, after the police search FII’s offices. Under the exclusionary rule A) certain FII records are excluded from subpoena by the government. B) certain parties to a criminal action may be excluded from a trial. C) illegally obtained evidence must be excluded from a trial. D) persons who have biases that would prevent them from fairly deciding the case may be excluded from the jury. Points Earned: 1.0/1.0 19.Hank is seventeen years old and is charged with a felony. In most states, Hank will be treated as A) a minor and tried in a juvenile court. B) an adult and tried in a regular court. C) an infant and punished without a trial. D) incapable of criminal conduct and tried after he turns eighteen. Points Earned: 1.0/1.0 20.Luna leases a commercial building to operate Mom’s Diner. During the term of the lease, Luna installs a new roof and a walk-in cooler, and repaves the parking lot. Most likely to meet the definition of a trade fixture is A) the cooler. B) the parking lot. C) the roof. D) none of these choices. Points Earned: 1.0/1.0 21.Roy leaves his pick-up truck at Sam’s Auto Service for an oil change. This is a bailment for A) neither party’s benefit. B) the parties’ mutual benefit. C) the sole benefit of the bailee. D) the sole benefit of the bailor. Points Earned: 1.0/1.0 22.Mona asks Ned if she can store her furniture in his garage while she serves a tour of duty with the U.S. Marines Corps. Ned agrees. This is a bailment for A) neither party’s benefit. B) the parties’ mutual benefit. C) the sole benefit of the bailee. D) the sole benefit of the bailor. Points Earned: 1.0/1.0 Correct Answer(s): D 23.Quint rents a riding mower from Rent-All, Inc. Quint leaves the mower in a remote location overnight. When he returns to retrieve it, it is gone. Liability for the loss most likely rests with A) Quint and Rent-All. B) Quint only. C) Rent-All only. D) neither Quint nor Rent-All. Points Earned: 1.0/1.0 Correct Answer(s): B 24.Orin owns Pilot’s Landing Office Park. His ownership rights include the right to sell or give away the property without restriction, as well as the right to commit waste, if she chooses. Orin’s ownership interest is A) a fee simple absolute. B) a leasehold estate. C) a life estate. D) the power of eminent domain. Points Earned: 1.0/1.0 25.Patsy possesses twenty-four acres of remote, rugged land. Patsy has the right to use the property, including extracting silver from an existing mine, for life. Patsy also has the right to lease the land for a period not to exceed her life. This ownership interest is A) a fee simple absolute. B) a leasehold estate. C) a life estate. D) the power of eminent domain. Points Earned: 1.0/1.0 26.Elsie and Frida buy a condo near the beach in Gulf Shores, Alabama. On the death of either owner, that owner’s interest in the condo passes to her heirs. This is A) a joint tenancy. B) a life estate. C) a tenancy in common. D) ownership in fee simple absolute. Points Earned: 1.0/1.0 27.Fergie and Gus buy a cabin in the Smoky Mountains near Gatlinburg, Tennessee. On the death of either owner, that owner’s interest in the cabin passes to the surviving owner. This is A) a joint tenancy. B) a life estate. C) a tenancy in common. D) ownership in fee simple absolute. Points Earned: 1.0/1.0 28.Region Construction Company has a right to drive its trucks across Staple Business, Inc.’s property, which is adjacent to Region’s office. This right is A) a leasehold estate. B) a license. C) an easement. D) a profit. Points Earned: 1.0/1.0 29.Jock makes a will. As a person who makes a will, Jock is A) an administrator. B) an executor. C) a settlor. D) a testator. Points Earned: 1.0/1.0 30.Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. To Clark’s doctor Dave, the symptoms indicate dementia. Elsa, who has significant contact with Clark, believes that he is in a state of mental decline. These facts indicate A) an urgency that Clark distribute his assets. B) Clark’s lack of capacity. C) Dave’s misdiagnosis. D) Elsa’s intent to take advantage of Clark. Points Earned: 1.0/1.0 31.One summer afternoon, Eve, Faruk, and Galen decide to each draft and sign a “Last Will and Testament.” Eve is fifteen years old, Faruk is seventeen, and Galen is nineteen. In most states, those with the capacity to execute a will would be A) Eve, Faruk, and Galen. B) Faruk and Galen only. C) Galen only. D) not Eve, Faruk, or Galen. Points Earned: 1.0/1.0 32.Kendall executes a separate written instrument to amend her prior will. This separate document is A) a codicil. B) a constructive will. C) an inter vivos will. D) a nuncupative will. Points Earned: 1.0/1.0 33.Mason creates a trust to prevent his son, Newt, the beneficiary, from assigning his rights to future payments of income from the trust. This is A) a charitable trust. B) a constructive trust. C) a spendthrift trust. D) an illegal trust. Points Earned: 1.0/1.0 34.Mona asserts that a deal she entered into with Nate is an unenforceable contract. Defenses to the enforcement of a contract include A) a desire not to perform. B) adverse economic consequences. C) results that do not match expectations. D) the lack of a party’s genuine assent. Points Earned: 1.0/1.0 Correct Answer(s): D 35.Lara applies for a firefighter’s job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is “a conditional employment offer.” Based on the court’s reasoning in Case 10.1, Ardito v. City of Providence, this letter is A) a bilateral contract that Lara accepted by applying for the job. B) a quasi contract on which Lara can rely for employment. C) a unilateral contract that Lara can accept by passing the exam. D) no contract. Points Earned: 1.0/1.0 36.Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling’s promise to pay. Avatar delivers. The contract is A) voidable. B) executed. C) executive. D) executory. Points Earned: 1.0/1.0 37.National Grocers, Inc., enters into a contract with Overland Shipping Company for the delivery of a shipment of fresh produce. If ambiguities appear in the contract, they will be construed against A) the party who drafted the contract. B) the party with the greater bargaining power. C) the promisor. D) the promisee. Points Earned: 1.0/1.0 Correct Answer(s): A 38.Nate tells Opal, “I might sell the skis that I bought last fall since I haven’t used them and the skiing season is almost over.” This is A) an acceptance of an offer. B) an invitation to accept an offer. C) an offer. D) a statement of future intent. Points Earned: 1.0/1.0 39.Bob offers to sell Carol his computer but conditions the sale on Carol accepting the offer by May 1. Bob may revoke the offer A) before Carol accepts the offer. B) before May 1, whether or not Carol has accepted the offer. C) only after Carol accepts the offer. D) only after May 1. Points Earned: 1.0/1.0 40.Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, “The price is too high. I will buy it for $90,000.” Dina has A) accepted the offer. B) made a counteroffer without rejecting the offer. C) rejected the offer and made a counteroffer. D) rejected the offer without making a counteroffer. Points Earned: 0.0/1.0 41. Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that A) a change in government is a risk ordinarily assumed in business. B) an unforeseen difficulty supported the contract modification here. C) Todos engaged in extortion or the so-called holdup game. D) Todos had a preexisting duty to supply the goods at the initial price. Points Earned: 1.0/1.0 42. Mary promises to pay her assistant Ned $10,000 in consideration of the services he provided over the years. Mary never pays Ned. Mary is A) liable for payment of the $10,000. B) liable only if Ned still works for Mary. C) not liable, because the consideration is in the past. D) not liable, because the consideration was unintentional. Points Earned: 1.0/1.0 43. George and Holly disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obligation. This is A) a covenant not to sue. B) an accord and satisfaction. C) a release. D) promissory estoppel. Points Earned: 1.0/1.0 44. Quinn promises to sell his recreational vehicle (RV) to Sid, who builds a structure behind his house in which to keep it. Quinn’s later attempt to renege on the promise is A) effective if Quinn did not ask Sid to build anything. B) effective if Quinn wants to sell the RV to someone else. C) not effective if Sid cannot obtain a similar RV for a similar price. D) not effective if Sid detrimentally relied on Quinn’s promise. Points Earned: 1.0/1.0 Correct Answer(s): D 45. Auto Body Repair Shop (ABRS) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and quits his job with Car Care Service. ABRS fails to provide a job for Ben. Ben has a cause of action based on A) an illusory promise. B) a release. C) past consideration. D) promissory estoppel. Points Earned: 1.0/1.0 Correct Answer(s): D 46. Olga, a minor, signs a contract to buy a computer from Phil, the owner of Quality Computer Store. Olga’s right to disaffirm the contract A) does not change the fact that Phil is bound by the contract. B) does not yet exist because Olga is still a minor. C) gives Phil, an adult, the right to disaffirm the contract. D) is not valid because a computer is a “necessary.” Points Earned: 1.0/1.0 47. Ann, an emergency medical technician, renders medical care to Brad, a minor. Under the ruling of the court in Case 13.1, Yale Diagnostic Radiology v. Estate of Harun, Ann may recover the cost from A) Brad only. B) Brad or Brad’s parent. C) Brad’s parent only. D) no one. Points Earned: 1.0/1.0 48. Ruth, a minor, charges groceries at Sam’s Mini-Mart. Two days later, Ruth disaffirms the purchase. Ruth owes Sam’s A) the reasonable value of the groceries. B) the retail value of the groceries. C) the wholesale value of the groceries. D) nothing. Points Earned: 1.0/1.0 Correct Answer(s): A 49. Mica, a minor, signs a contract to pay Natural Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is A) a disaffirmance. B) an emancipation. C) a ratification. D) a restitution. Points Earned: 1.0/1.0 50. On Tad’s eighteenth birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on A) the car’s condition when Tad bought it. B) the car’s current condition. C) whether Tad acts within a reasonable period of time. D) whether U-Pick has the right to disaffirm. Points Earned: 1.0/1.0 51. Jon agrees to sell his K9 Sports Equipment store to Lacy. As part of the sale, Jon promises never to open a similar, competing store anywhere. Jon’s promise is most likely A) invalid because it is part of a sale of an ongoing business. B) invalid because of the unreasonable terms of area and time. C) valid because it is part of a sale of an ongoing business. D) valid because Jon and Lacy apparently have the capacity to contract. Points Earned: 1.0/1.0 52. Andy and Biz Company (BC) enter into an oral contract under which Andy agrees to clean BC’s office for two years. This contract is enforceable by A) Andy only. B) BC only. C) either party. D) neither party. 53. Ollie buys a cup of coffee for $2, a magazine for $5, and a boombox for $600. The requirement of a writing for the enforceability of a contract for a sale of goods at, or for more than, a certain price is governed by A) the common law. B) the parol evidence rule. C) the parties’ agreement. D) the Uniform Commercial Code. Points Earned: 1.0/1.0 54. Beta Grocers orders by phone twenty cartons of canned beets from Carotene Food Packers, Inc. After ten cartons are delivered and accepted, Beta repudiates the contract. Carotene can enforce the contract to A) any extent because the order was placed orally. B) no extent because the order was placed orally. C) the extent of the ten accepted cartons. D) the extent of the twenty ordered cartons. Points Earned: 1.0/1.0 55. Eve files a suit against Financial Associates, Inc. (FA), to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if A) Eve foreseeably, justifiably, and detrimentally relied on a promise by FA. B) FA continues to deny the existence of a contract. C) neither party has begun to perform. D) the deal does not involve customized goods. Points Earned: 1.0/1.0 Correct Answer(s): A 56. Uri and Vicky orally agree on the sale of Uri’s Nite Club to Vicky and note terms on a pair of the Club’s napkins, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain A) every term. B) the essential terms. C) the preliminary terms. D) the qualitative terms. Points Earned: 1.0/1.0 57. Don agrees to buy Ed’s Bicycle Store on the condition that First State Bank approves the financing. This approval is A) a concurrent condition. B) a condition precedent. C) a condition subsequent. D) a solvent condition. Points Earned: 1.0/1.0 58. 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. 59. Tia signs a lease that states any change in the zoning law that affects the lease will cause its termination. Union City’s zoning board adopts an affecting zoning classification. This adoption satisfies A) no condition. B) the condition precedent. C) the concurrent condition. D) the condition subsequent. Points Earned: 1.0/1.0 Correct Answer(s): D 60. Hu contracts with Internet Service, Inc. (ISI), to pay $500 for its services. After ISI performs, they sign an accord, in which Hu promises to pay $400 within ten days instead of $500. Hu does not pay. ISI can sue Hu under A) neither the accord nor the contract. B) the accord only. C) the accord or the contract. D) the contract only. Points Earned: 1.0/1.0 61. Jane and Kelly want Lucy to replace Kelly as a party to their contract. They can best accomplish this by A) accord and satisfaction. B) novation. C) reinvention. D) specific performance. Points Earned: 1.0/1.0 62. Beachside Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it according to the contract specifications. Candy hires Do-We Fix-It Company to finish the project. Candy may recover from Beachside A) the contract price less costs of materials and labor. B) the contract price. C) the costs needed to complete construction. D) profits plus the costs incurred up to the time of the breach. Points Earned: 1.0/1.0 63. Mona contracts to repair a computer for NuData, Inc. (NDI). Mona knows that without the computer, NDI will lose a sale. Mona does not perform as promised. NDI files a suit against Mona. As consequential damages, NDI can recover A) the cost of a new computer. B) the difference between Mona’s price and the actual cost of repair. C) the loss of profit from the lost sale. D) nothing. Points Earned: 1.0/1.0 Correct Answer(s): C 64. Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to A) avoid reletting the premises to recover damages from Ray. B) make reasonable efforts to relet the premises to mitigate damages. C) relet the premises to recover damages from Ray. D) sell the premises to recover damages from Ray. Points Earned: 1.0/1.0 65. A enters into a contract with B to provide surface material for A’s tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is A) an excessive estimate of the loss on a breach. B) a reasonable estimate of the loss on a breach. C) designed to penalize the breaching party. D) intended to quickly provide cash to the nonbreaching party. Points Earned: 1.0/1.0 66. Lou and Mira want to rescind their contract under which Lou sold an MP3 player to Mira for $50. To rescind the contract A) Lou must return the $50 and Mira must return the player. B) Lou must return the $50 only. C) Mira must return the player only. D) the parties can keep the “benefits” of their bargain. Points Earned: 1.0/1.0 67. Rikki signs a check “pay to the order of Scholar University” drawn on Rikki’s account in State Bank to pay her tuition. Rikki is A) the certifier. B) the drawee. C) the drawer. D) the payee. Points Earned: 1.0/1.0 68. Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is A) a cashier’s check. B) a certified check. C) a trade acceptance. D) a traveler’s check. Points Earned: 1.0/1.0 69. Steve steals one of Tricia’s checks and forges her signature. Tricia’s bank, Unity Bank, pays the check. Tricia can recover from A) Steve, but not Unity Bank. B) Unity Bank, which cannot recover from Steve. C) Unity Bank, which can recover from Steve. D) no one. Points Earned: 1.0/1.0 70. First National Bank receives a check drawn on the account of Get-Rich Industries, Inc., one of the bank’s customers, at 3 P.M. Friday. Harry, the presenter of the check, is not one of the bank’s customers. The bank uses deferred posting with a 2 P.M. cutoff hour. If it decides to dishonor the check, it must do so by midnight A) Saturday. B) Sunday. C) Monday. D) Tuesday. Points Earned: 1.0/1.0 Correct Answer(s): D 71. Delicious Coffee Company hires Elton to sell Delicious’s products in a certain area. Delicious agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The key factor in whether Elton is Delicious’s employee is A) the amount of Elton’s salary. B) the control Delicious has over the details of the work. C) the length of the trial period. D) the title that designates Elton’s position. Points Earned: 1.0/1.0 72. Louis, a certified public accountant and an investor, and Maria, an insurance salesperson and a realtor, may create an agency relationship for A) a business purpose only. B) a legal purpose only. C) any purpose. D) no purpose. Points Earned: 0.0/1.0 73. KupaJava hires Lola to manage one of KupaJava’s seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava’s A) employee. B) independent contractor. C) principal. D) work for hire. Points Earned: 1.0/1.0 74. Regional Investment Corporation (RIC) hires Sam, a real estate agent, to locate investment properties for RIC. Sam learns of a warehouse available for $100,000, buys it himself, and offers it to RIC for $200,000. Most likely, Sam A) breached the agent’s fiduciary duties to the principal. B) did nothing wrong. C) failed to take advantage of a business opportunity. D) set an unreasonable price based on current market value. Points Earned: 1.0/1.0 Correct Answer(s): A 75. Jody owns KuppaJava Kiosks, a sole proprietorship. Jody’s liability is A) limited by state statute and varies from state to state. B) limited to the extent of capital expenditures. C) limited to the extent of his or her original investment. D) unlimited. 76. Jim organized, and owns and operates, Jim’s Landscaping Service in the simplest form of business organization. This is A) a corporation. B) a limited liability company. C) a partnership. D) a sole proprietorship. Points Earned: 1.0/1.0 77. Nico is interested in buying a franchise from Oz Inc. For Nico to make an informed decision concerning this purchase, Oz must disclose in writing or online A) general estimates of costs and sales, but not the basis for them. B) material facts such as the basis of projected earnings figures. C) no information. D) start-up requirements, but not renewal conditions. 78. Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most franchise agreements, it will specify that Comida can terminate the franchise A) at will. B) for any reason. C) for cause only. D) for no reason. Points Earned: 1.0/1.0 79. Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed by the Uniform Partnership Act A) in the absence of an express agreement. B) in the absence of an implied agreement. C) only in the presence of an express agreement. D) under all circumstances. 80. Erte, a partner in Fluoride Dental Associates, applies for a loan with Great State Bank allegedly on Fluoride’s behalf but without the authorization of the other partners. Great State knows that Erte is not authorized to take out the loan. Erte’s default on the loan results in A) Erte and Fluoride’s joint liability for the amount. B) Erte’s sole liability for the amount. C) Fluoride’s sole liability for the amount. D) neither Erte’s nor Fluoride’s liability. 81. Mead, Nero, and Olen do business as Pipe & Plumbing Services. After Mead’s relationship to the firm ends, Nero and Olen agree to discontinue the business. This is A) dissociation. B) dissolution. C) gross negligence. D) simple misconduct. Points Earned: 1.0/1.0 Correct Answer(s): B 82. Jay is considering forms of business organization for Jay’s Designs, an architectural firm. An advantage of a limited liability partnership is that partners can avoid personal liability for A) any partnership obligation. B) only other partners’ wrongdoing. C) only partnership obligations that exceed capital contributions. D) only partnership obligations that fall within capital contributions. Points Earned: 0.0/1.0 83. Jack and Kyra are partners in Law Firm, LLP, a limited liability partnership. Jack supervises Kyra, who negligently fails to appear in court on behalf of Milo, a client. Liability to Milo rests with A) Jack and Kyra. B) Jack only. C) Kyra only. D) neither Jack nor Kyra. Points Earned: 1.0/1.0 84. Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation. Lily and Moe are Kleen’s officers. As with other corporations, the responsibility for the overall management of Kleen rests with A) the board of directors. B) the officers. C) the owners. D) the shareholders. Points Earned: 1.0/1.0 85. Raw Resources Corporation authorizes Stefan, its employee, to oversee its mining operation. In the course of this employment, Stefan disposes of the mine’s waste illegally. Liability for this crime most likely rests with A) neither Raw Resources nor Stefan. B) Raw Resources and Stefan. C) Raw Resources but not Stefan. D) Stefan but not Raw Resources. 86. Bernie and Chan want to form a corporation to market MP3 accessories. The first step in the incorporation procedure is to A) file the articles of incorporation. B) hold the first organizational meeting. C) obtain a corporate charter. D) select a state in which to incorporate. 87. Frida and Gregor want to market a new line of fishing gear. To avoid income taxes at the corporate level, they should form A) a C corporation. B) a close corporation. C) an S corporation. D) a private corporation. 88. Lon and Merry act as the incorporators for NuGame Corporation. After the first board of directors is chosen, subsequent directors are elected by a majority vote of NuGame’s A) board of directors. B) incorporators. C) officers. D) shareholders. 89. Frida, Gayla, and Hart occupy the positions of director on the board of Integral Components Corporation. With respect to these directors, a quorum is the minimum number A) who must be at odds in a dispute to call for its resolution. B) who must be present to validly transact business. C) whom the shareholders may remove from office at any one time. D) whose positions must be vacant to warrant an election. Points Earned: 1.0/1.0 90. Frawsty Corporation distributes beverages in the greater Northwest. Frawsty’s board of directors can delegate some of its functions to A) Frawsty’s incorporators. B) Frawsty’s officers. C) Frawsty’s shareholders. D) no one. 91. Dolly and Elbert are shareholders of Friendly Credit, Inc. As shareholders, they must approve A) amending the articles of incorporation. B) declaring a corporate dividend. C) hiring a chief executive officer. D) all of the choices. 92. Pam opens Quik Xpress, a local delivery service. Unless Pam expressly adopts a certain form of business organization, the law considers Quik to be A) a corporation. B) a limited liability company. C) a partnership. D) a sole proprietorship. Points Earned: 1.0/1.0 Correct Answer(s): D 93. Chuck and Dolph are partners in Eden Apartments, a new general partnership and business enterprise. As general partners, Chuck and Dolph are subject to A) liability limited to the amount of their investment in Eden. B) liability limited to the deductible on Eden’s insurance policy. C) no liability. D) personal liability for Eden’s debts and obligations. Points Earned: 1.0/1.0 94. Stef is starting a small machine shop—Thunder Road Hydraulics—and is considering whether to organize the business as a limited liability company or a limited liability partnership. Both forms A) do not limit their owners’ personal liability for business debts. B) limit their owners’ personal liability for business obligations. C) obviate the need to obtain insurance for business liability risks. D) require their owners to obtain insurance for business liability risks. Points Earned: 1.0/1.0 95. Howie operates Island Burger Restaurant as a corporation. A customer slips and breaks her ankle in the restaurant and is awarded damages by a court. Those damages must be paid by A) Howie only. B) Island Burger only. C) Howie and Island Burger. D) neither Howie nor Island Burger. Points Earned: 1.0/1.0 96. Dana and Etta operate Fast Bikes, a bicycle shop, as a partnership. Taxes on the business’s income are paid by A) Dana and Etta only. B) Dana, Etta, and the business. C) not Dana, Etta, or the business. D) the business only. Points Earned: 1.0/1.0 97. Seafood Restaurant Company pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by A) Congress, through enabling legislation. B) the courts, through the adjudicatory process. C) the U.S. Constitution, through the _ Amendment. D) the U.S. Department of the Treasury, through a final order. Points Earned: 1.0/1.0 98. The U.S. Fish and Wildlife Service utilizes notice-and-comment rulemaking. This involves a period during which A) judges, legislators, and the president are asked about a proposed rule. B) potential violators of a proposed rule are notified and publicized. C) the administrators “notice” a problem and “comment” on it. D) the public is asked to comment on a proposed rule. Points Earned: 1.0/1.0 99. In reviewing the actions of the U.S. Office of Nuclear Energy and other agencies, the courts A) are usually reluctant to review questions of fact. B) rarely defer to the technical expertise of administrative agencies. C) often rule on the merits of policy determinations. D) all of the choices. Points Earned: 1.0/1.0 100. Nursing Home Care Company is charged with violating a rule of the Social Security Administration. Most likely, Nursing Home Care will be required to appear at a hearing presided over by A) a federal appellate court judge. B) a federal district court judge. C) an administrative law judge. D) a U.S Marshal.

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