Business Law exam 1 Verified Questions With Answers (With Choices ) 2025 Latest Version.

Business Law exam 1 Verified Questions With Answers (With Choices ) 2025 Latest Version. T/F) 1 Common law is a type of law that only applies to "common" transactions involving less than $100. False (T/F) Law consists of suggestions and policies that society uses to advise individuals in their relationships. False (T/F)The right to privacy against an unreasonable search of one's home is guaranteed by the Fourth Amendment to the United States Constitution. True (T/F)Generally, a right can exist without a duty. False (T/F) All of our laws are found in the United States Constitution. False (T/F) The EEOC is an example of a law drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL). False A ________ is a decision by a court that becomes the law in future cases that involve the same legal problem. a. warrant b. regulation c. statute d. precedent (d) Precedent The Uniform Commercial Code was written by: a. the Congress. b. the President. c. a national association of legal experts. d. the Supreme Court. (c) a national association of legal experts. (The U.C.C. was drafted by the National Conference of Commissioners on Uniform State Laws, composed of legal experts from every state. The UCC has been adopted, in whole or in part, by almost all the states.) Courts have ruled that an employee's e-mail created using their employer's computer is: a. not private. b. private under all circumstances. c. private only if the employee so designates at the beginning of the message. d. not private unless the employer is being sued. (a) not private (Generally, an employee has no expectation of privacy when using an employer's computer or equipment) ________ law creates, defines, and regulates right and liabilities. a. Substantive b. Private c. Case d. Statutory (a) Substantive (Substantive law creates, defines, and regulates rights and liabilities.) (T/F)Interrogatories are written questions asked by a lawyer during discovery. True (T/F) A mistrial occurs when the jury awards the plaintiffs a verdict with no damages. False (T/F) Jurisdiction refers to the proper place for a trial. False (T/F)A writ of certiorari is issued when the Supreme Court takes a case. False (A writ of certiorari is an order by the U.S. Supreme Court granting a right of review by the court of a lower court decision) (T/F)Arbitration is the settlement of a dispute through the use of a messenger who carries to each side of the dispute the issues and offers in the case. False, this would be "Mediation" ________ is the power given to courts to hear certain types of cases. a. Jurisdiction b. Mediation c. Arbitration d. Summary judgment (a) Jurisdiction (Jurisdiction is the power of a court to decide a case.) The ________ initiates a lawsuit by filing a(n) ________. a. defendant, answer b. movant, motion to proceed c. plaintiff, complaint d. none of the above. (c) plaintiff, complaint (The plaintiff initiates the lawsuit by filing a complaint.) A jury is picked during the ________. a. discovery phase of the litigation b. voire dire examination c. instructions by the judge d. opening statements (b)voire dire examination (Voire dire occurs immediately prior to the beginning of trial, before the opening statements.) The ________ rule(s) on the admissibility of evidence. a. judge b. jury c. attorneys d. defendant (a) Judge (The judge controls the legal proceedings during all phases of the litigation process and either admits or excludes evidence for a jury to consider.) In mediation, the mediator acts mostly like a ________ for the parties. a. judge b. attorney c. messenger d. expert witness (c) Messenger (A mediator facilitates the resolution of a dispute by moving information between parties who, typically, are in separate rooms in an office. The mediator tries to bring the parties to a win-win resolution of the dispute). (T/F) The focus of business ethics is to balance the goal of profits with the values of individuals and society. True (T/F) Positive law would allow a business to engage in unfair practices, as long as its actions are not illegal. True (T/F)Under a moral standard based on natural law, it may be necessary to engage in civil disobedience positive law to preserve fundamental individual rights. True (T/F)The "front page" ethics test holds that an action is ethical when, having been published in the newspaper, it is not offensive. True (T/F) The Wall Street Journal Model analysis includes three questions that can be remembered best as the "three Cs" of compliance, community, and consequences. False (T/F) Groupthink is a very valuable and beneficial part of the ethics analysis process. False Which of the following situations reflects a possible conflict of interest? As a manager you: a. offer a company contract to a family friend without checking competing bids. b. hire a relative for a company position although another is more qualified. c. buy a piece of realty that would be suitable for a planned company project. d. all of the above. (d) all of the above The ethical category of "fairness" is best expressed as: a. treat others as you want to be treated. b. "let the buyer beware." c. he who laughs last laughs best. d. different strokes for different folks. (a) treat others as you want to be treated When balancing the interests of various stakeholders to resolve ethical dilemmas in business, managers should: a. identify all parties who could be injured by the proposed action. b. define the problem from both the decision maker's and opposing viewpoints. c. ask whether they would be willing to describe a proposed action to their family, the board of directors, a congressional hearing, or other public forum. d. all of the above. (d) all of the above The Blanchard and Peale three-part test for resolving ethical dilemmas consists of the following questions: a. Is it legal? Is it ethical? Is it moral? b. Is it legal? Is it balanced? How does it feel? c. Is it ethical? Is it right? Is it front-page material? d. Is it right? Is it balanced? Does it seem odd? (b) Is it legal? Is it Balanced? How does it feel? (Personalizing business actions helps managers see the potential harm that comes from poor business judgments.) (T/F)A state's police power allows it to create laws to protect the general welfare, morals and safety of the people. True (T/F)In the event of direct conflict between a federal and a state law, courts balance the federal interest with the state's interest. False (T/F)For the past century, the courts generally have followed the "living document" view in interpreting the Constitution. True (T/F)Administrative agencies have virtually no impact on governmental regulation. False (T/F) The purpose of the first ten amendments to the Constitution was to enlarge the power of the federal government. False The Supremacy Clause of the Constitution refers to: a. the power of the President. b. the power of the Supreme Court to make decisions. c. the power of the Federal Government to preempt state law in certain areas. d. all of the above. (c) the power of the Federal Gov. to preempt state law in certain areas. (Article VI of the Constitution says "This Constitution... shall be the supreme law of the land." When the federal government legislates in an area where it is expressly authorized by the Constitution, state law is pre-empted.) The Commerce Clause of the Constitution: a. can be used to regulate a non-economic activity. b. was declared unconstitutional in 1948. c. prohibits the U.S. government from engaging in international commerce. d. (a) Can be used to regulate a non-economic activity. (The Commerce Clause can be used to regulate activities having substantial effect on interstate commerce even if it is a non-economic activity.) The due-process clause: a. allows the U.S. government to take private property without due process. b. allows a state to take private property without due process. c. requires the government to comply with established legal procedures before taking private property. d. does not apply to state governments. (c) requires the government to comply with established legal procedures before taking private property. (Constitutional rights to due process are guaranteed in the Fifth and Fourteenth Amendments. At this core, procedural due process requires adequate notice and a fair hearing. Our entire court system is based on notions of due process and fair dealing.) The Equal Protection clause: a. applies to both state and federal governments. b. prohibits any classification whatsoever. c. applies only to conduct by private parties. d. does not permit reasonable classifications. (a) applies to both state and federal governments. The branches of government include: a. administrative, legislative, and judicial branches. b. legislative and judicial branches. c. legislative, executive, and judicial branches. d. legislative, administrative, executive, and judicial branches. (c) legislative(congress, make laws), executive (president, enforces laws that congress make), judicial branches (supreme court and 9 justices, they interpret the law that congress makes). (T/F) The Sherman Act provides that every contract in restraint of trade is illegal. True (T/F) Price discrimination is not permitted even when it can be justified on the basis of a difference in grade, quality, or quantity. False (T/F) Tying occurs when a seller offers a rebate on a product that is similar to another. False (T/F) The Clayton Act is not required to analyze price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition. False (T/F) Price fixing involves only agreements between competitors. True The federal government may impose regulations on business: a. by virtue of its police power. b. to protect the general welfare, health, safety, and morals of the people. c. if those regulations are required by the economic needs of the nation. d. if those regulations do not impose an unreasonable burden on interstate commerce. (c) if those regulations are required by the economic needs of the nation. The FTC (Federal Trade Commission) Act prohibits: a. price fixing. b. labor unions. c. unfair methods of competition. d. price discrimination. (c) unfair methods of competition. The Sherman Act focuses on: a. unfair methods of competition. b. combinations or contracts in restraint of trade. c. permitted price discriminations. (b) combinations or contracts in restraint of trade. (The Sherman Act's focus is restraint of trade and agreements on price fixing.) Manufacturers who agree among themselves on a price at which they will sell are guilty of: a. tying. b. horizontal price fixing. c. price discrimination. d. market power. (b) horizontal price fixing A person found guilty of violating the Sherman Act may be subject to: a. fine only. b. imprisonment only. c. fine, imprisonment, and injunction. d. fine and imprisonment only. (c) fine, imprisonment, and injunction. (T/F)The Mainstream Marketing Services v. FTC case involved a question of 1st amendment 'commercial speech.' True (T/F)The Freedom of Information Act (FOIA) requires any federal or state agency to publish all documents and records. False (T/F)A federal agency planning to adopt a new regulation is required to give public notice of such intent if the new regulation affects the constitutional rights of citizens. False (T/F)Regulations do not have the same legal effect as statutes. False (T/F)Administrative agencies make rules, investigate violations and sit in judgment of violators. True (T/F)The Sunshine Act requires that meetings of federal agencies are open to the public when the impacted constituents request an open meeting. False (T/F) Within the scope of its power, an administrative agency is authorized to make decisions without a jury, and can be regarded as a court of limited jurisdiction. True An administrative agency's subpoena to testify or to produce records: a. is prohibited by Constitutional guarantees against search and seizure. b. is an illegal attempt to gain information by compulsion. c. cannot be opposed on the grounds that it is search and seizure. d. must be approved by corporate officers to be effective. (c) Cannot be opposed on the grounds that it is search and seizure An administrative agency: a. is not empowered to act as a court with regard to its own regulations. b. can hear complaints only in the presence of a jury. c. acts as a specialized court of limited jurisdiction. d. cannot impose penalties for violation of its regulations. (c) acts as a specialized court of limited jurisdiction The public does not have access to the activity of administrative agencies though which of the follow ways? a. Public announcements b. Open office hours c. Open meetings d. Open records (b) open office hours (T/F) Franchising is a form of licensing that now is very common in international business. True (T/F) When an international sale is made, the law from the party who drafted the contract governs a dispute. False (T/F)GATT is a multilateral treaty subscribed to by 126 countries. True (T/F)In GATT, the "most favored nation" clause allows a nation to discriminate against nations with whom they trade, depending on the political climate in the country. False (T/F)A common barrier to the free movement of goods across borders is transportation costs. False (T/F)The Foreign Corrupt Practices Act allows modest payments to influence foreign officials, if legally allowed in the host country. False NAFTA seeks to eliminate tariffs among which countries? a. All members of the United Nations. b. United States, Canada, and Mexico. c. United States and Japan. d. Members of the European common market. (b) United States, Canada, Mexico Which of the following statements is true regarding the World Trade Organization (WTO)? a. It provides a dispute settlement body to promote resolution of trade disputes. b. The WTO has been in place since 1947. c. The WTO coordinates its activities with GATT. d. All of the above. (a) It provides a dispute settlement body to promote resolution of trade disputes. The transfer of technology rights in a product to allow another firm in a foreign country to produce a product in return for royalties or other specified payments is called: a. exporting. b. transfer agency representation. c. licensing. d. subsidiary sales. (c) licensing The U.S. government has taken legislative action to increase exports of U.S. good to foreign countries. Which of the following is not one of those actions? a. Export Trading Company Act b. Expropriation Act c. Foreign Sales Corporations Act d. The Overseas Private Investment Corporation (c) Foreign Sales Corporations Act (T/F) A computer crime generally can only be committed by a person with a computer and the knowledge to operate it. True (T/F)Destroying information stored on a computer may be a crime. True (T/F)A crime consists of four elements: the mental state, the intent, the act, and the injury. False (T/F)The Racketeer Influenced and Corrupt Organizations (RICO) Act is a statute whose purpose is limited to violations of organized crime. False (T/F)The Foreign Corrupt Practices Act (FCPA) makes it a felony for a foreign company or one of its representatives or employee to influence decision makers while under U.S. jurisdiction. True Federal legislators have proposed which of the following criminal penalties specifically oriented to corporate management? a. Mandatory prison sentences for officers and directors of a corporation who are convicted of crimes. b. Holding shareholders personally responsible c. Reducing prison sentences for corporate employees d. Using the business judgment rule as a penalty for crimes (a) Mandatory prison sentences for officers and directors of a corporation who are convicted of crimes. A crime generally consists of: a. a mental state and an act or omission. b. an act. c. an act or omission. d. a mental state and harm. (a) a mental state and an act or omission We have an expert-written solution to this problem! A person who did not necessarily commit the crime can still be held criminally responsible for acts committed by others: a. only for crimes committed outside the United States. b. only when the person who actually committed the crime is a supervisor. c. only when the crime committed is a white-collar crime. d. when the person is a manager with responsibility over the act of his employee, who committed the act. (d) when the person is a manager with responsibility over the act of his employee, who committed the act. The Fifth Amendment protection against self-incrimination applies to: a. both individuals and corporations. b. corporate officers to prevent disclosure of corporate documents. c. individuals only. d. corporations only. (c) individuals only Due process rights apply to: a. individuals only. b. both individuals and corporations. c. corporations only. d. individuals only in their official capacity within a business. (b) Both individuals and corporations (T/F)Truth is generally an absolute defense to defamation. True (T/F)Negligence can be proven without showing actual damage. False (T/F)Some individuals are not subject to tort liability for defamation. True (T/F)Strict liability commonly arises in situations in which a statutory duty is imposed or in product liability. True (T/F)A store owner or employee may detain a customer for a reasonable time even if the customer has not shoplifted. True In a claim for negligence, the plaintiff must show the defendant breached a reasonable duty of care, which is: a. the duty which any person can exercise in that situation. b. the duty which an extraordinary person would exercise under similar circumstances. c. that which a reasonably prudent person would exercise under similar circumstances. d. that duty which a sensitive person would exercise under similar circumstances. (c) that which a reasonably prudent person would exercise under similar circumstances Generally, torts arise from a violation of a ________ duty. a. public b. private c. social d. criminal (a) public. (For example, we have the private duty to tell the truth about our neighbor. Violation of that duty may give rise to the tort of defamation.) Torts can be classified as: a. intentional only. b. negligence only. c. strict liability only. d. intentional, negligence, and strict liability. (d) Intentional, negligence, and strict liability. (Examples include the intentional tort of defamation, negligence tort of malpractice, and the strict liability tort of product liability.) Fred owed Barney money. Barney called Fred's home several times per day for five weeks asking for repayment, with some of the calls coming after midnight. Fred is now depressed and can't sleep. Barney might be liable for: a. infliction of emotional distress. b. defamation. c. wrongful interference with a contract. d. trespass to land. (a) Infliction of emotional distress (The tort of emotional distress sometimes carries physical manifestations such as physical depression and insomnia.) To successfully defend a claim of false imprisonment, a merchant must show: a. the customer was kept an unreasonable amount of time. b. the merchant acted with unnecessary force. c. the merchant acted based on reasonable suspicion. d. the customer slandered the merchant. (c) The merchant acted based on reasonable suspicion. (This gives the merchant probable cause which is a defense to false imprisonment.) (T/F)Trade dress, which refers to the packaging look and overall image of a product, is protected by the Clayton Act. False, (this is protected under the Lanham Act) (T/F)Once copyrighted, an idea may not be copied by a non-holder of the copyright. False (T/F)In a "work made for hire" arrangement, the author of the work retains the copyright for 50 years. False It is no longer necessary to include a notice of copyright in order to retain a copyright to a literary or artistic work. True (T/F)A patent holder must have complied with proper notice requirements in order to be able to recover infringement damages. True (T/F)Trade secrets are not protected by federal law. True Three types of patents available under U.S. law are: a. design, plant, utility. b. design, packaging, invention. c. utility, product, design. d. utility, regulatory, common law. (a) Design, plant, utility In order for a plaintiff to obtain a court order enjoining a competitor from using her trademark, she must show: a. she invested a certain level of resources to develop the mark. b. the competitor's use of the mark is in danger of confusing the public. c. the competitor is making unfair profits from the use of the mark. d. the competitor's product is different from her own. (b) the competitor's use of the mark is in danger of confusing the public. (This is the primary legal factor in order for the plaintiff to prevail on her claim) A copyright holder does not have the exclusive right to do which of the following? a. To distribute copies or recordings of the original work. b. To display or perform the original work in public. c. To prepare works that are derived from the original work. d. To obtain a court order enjoining use of the original work by another. (d) to obtain a court order enjoining use of the original work by another. Trade dress protection involves: a. words, symbols, and devices. b. a product's total image. c. clothing designs. d. formulation, device, or compilation of information. (b) a product's total image. (in the case of consumer goods, includes the overall packaging look in which each product is sold.)