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Under the __________ view of the firm, resources can be a source of competitive advantage if they are __________. a. resource-based, rare b. systems-based, hard to copy c. resource-based, available to competitors d. systems-based, available to competitors Answer: Which of […]

The __________ doctrine imposes liability for physical injury to child trespassers caused by artificial conditions on the land. a. negligence per se b. foreseeable trespasser c. attractive nuisance d. respondeat superior Answer: Under CERCLA which of the following is true […]

Fact Pattern 15-1 Gretta is the CEO of a paper company built near a river used in interstate commerce although the state in which the company is located is land locked and not near the coast. Gretta determines that a […]

When the seller provides the buyer with a document enabling them to pick up goods held at an independent warehouse, the risk of loss passes to the buyer when the: a. goods are picked up by the buyer. b. contract […]

Which of the following is NOT a part of the safe harbor provision for forward-looking statements under the 1934 Act? a. A statement containing a projection of revenues, income, or other financial items. b. A statement of the plans and […]

A(n) __________ is created when two or more persons agree to place their money, labor, or skills in a business and to share the profits and losses. a. sole proprietorship b. general partnership c. S partnership d. C corporation Answer: […]

Fact Pattern 4-1 Martin is a legal secretary for Allison, a partner in a large law firm in Knoxville. Allison finds Martin quite annoying. The last straw occurs when Martin tells Allison that she looks pale and appears to have […]

Under Rule 10b-5 a company may not have a “no comment” policy, and must act to dispel untrue rumors. a. True b. False Answer: The first step in the FDA approval process for new drugs is their classification by the […]

Fred sued Document Security Company, alleging he had suffered injuries to his hands as a result of attempting to fix a jam in one of Document Security’s paper shredders. Fred alleged the shredder was defective because it failed to contain […]

The business judgment rule is applicable only if the directors make an informed decision. a. True b. False Answer: Which of the following is true regarding “holder” claims? a. They are disallowed by federal statute. b. State law is preempted, […]

Conditions __________ occur when the mutual duties of performance are to take place simultaneously. a. precedent b. concurrent c. subsequent d. consequential Answer: The debtor-in-possession must honor all prebankruptcy executory contracts. a. True b. False Answer: False Section 2 of […]

A prospectus is a selling document as well as a disclosure document. a. True b. False Answer: Which of the following requirements is not required by a corporation to qualify for S corporation status? a. The corporation must have only […]

Toby is the commissioner of environmental matters for State X, the state with the cleanest air in the nation. U.S. Pollution Company wants to move into State X. Unfortunately, State X has had a severe economic downturn. Many of the […]

The National Labor Relations Act prohibits employers from interrogating employees about union sentiment or activity. a. True b. False Answer: As used in the text, the term “legal astuteness” refers to the ability of a manager to avoid situations making […]

In the __________ case, the U.S. Supreme Court upheld Title II of the Civil Rights Act of 1964 prohibiting discrimination or segregation on the grounds of race, color, religion or national origin in any inn, hotel, motel, or other establishment […]

Bob goes bankrupt. He has several creditors and a small amount in savings. He owes XYZ Bank $200,000 for which he used his home as collateral. XYZ Bank properly perfected its interest in the home. Bob additionally owes $3,000 in […]

The __________ control the civil trial practices in all of the U.S. district courts. a. Federal Rules of Civil Procedure b. Universal Rules of Civil Procedure c. National Rules of Civil Court Conduct d. Common Rules of Civil Procedure Answer: […]

A bank’s __________ rate is the lowest published rate of interest at which the bank lends to its best and most creditworthy commercial customers. a. lien b. term c. prime d. secured Answer: Under the efficient market hypothesis, in an […]

Paul attempted to hit Bruce without good cause; but Bruce ducked, and Paul hit Alice instead. Alice was shocked when she felt the blow because she had been looking the other way and did not see it coming. Which of […]

A contract is __________ when one party is induced to enter a contract without having any meaningful choice. a. substantively unconscionable b. procedurally unconscionable c. procedurally impracticable d. substantively impracticable Answer: In theCitizens United v. Federal Election Commission case referenced […]

Fact Pattern 17-2 Janie is a pharmacist in Small City. At the direction of several physicians in Small City, she begins mixing up a treatment for indigestion that is prescribed by the physicians. She advertises the mixture, and she and […]

Consideration can be either a promise to do a certain act or the performance of the act itself. a. True b. False Answer: Which of the following is true regarding the growth of socially responsible mutual funds? a. Such funds […]

An outstanding mortgage balance in excess of the value of a house is referred to as negative equity. a. True b. False Answer: The __________ has primary responsibility for regulating the labeling of food a. Federal Trade Commission b. Food […]

Which of the following refers to private plaintiffs bringing actions from persons submitting false claims for government funds? a. Pro se litigants b. Qui tam plaintiffs c. Affiliated litigants d. State-controlled plaintiffs Answer: Before implementing a mandatory safety standard, the […]

Mere promotion of a security makes a person a seller and, therefore, liable under section 5 of the 1933 Act based upon the sale of a security without an effective registration statement or by means of a noncomplying prospectus. a. […]

Which of the following is NOT true regarding the misappropriation theory of insider trading? a. If a trader discloses to a source of nonpublic information that he or she plans to trade on the basis of that information, there is […]

Chapter 13 does not provide a bankruptcy discharge for corporations. a. True b. False Answer: The agreement of all the commercial airlines not to lower their fares would be an example of a: a. vertical restraint of trade. b. horizontal […]

In CASE 20.4In re Abbott Laboratories Derivative Shareholders Litigation(2003), the shareholder-plaintiffs alleged the corporate directors breached their duty of good faith through their failure to follow up on repeated notices of regulatory noncompliance. How did the court rule? a. The […]

For purposes of diversity jurisdiction in federal court, which of the following is true regarding a person’s citizenship? a. A person is a citizen of the state where that person has his or her legal residence or domicile, and there […]

The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products “Made in USA.” a. True b. False Answer: Which of the following are included within OSHA requirements regarding posting of information? a. OSHA requires […]

In all cases, an agency agreement must be written in order to be enforceable. a. True b. False Answer: In CASE 5.2EBC I, Inc. v. Goldman, Sachs & Co., (2005) the plaintiffs claimed that Goldman Sachs breached a fiduciary duty […]

An equipment lease that serves the purpose of financing is known as a(n) __________ lease. a. finance b. temporary c. lending d. debtor’s Answer: If a product valuable to society is unavoidably unsafe, the __________ determines whether the dangerous product […]

Helen tells her nephew, Bernard, that she will pay him $100 if he will stop smoking for six months. Helen was hopeful that if Bernard stopped smoking for six months, he would stop altogether. Bernard stops smoking for six months […]

The U.S. Supreme Court struck down Arizona’s “Legal Arizona Worker’s Act of 2007” because it went beyond the Immigration Reform and Control Act’s savings clause which preempts states from imposing civil or criminal sanctions on employers hiring aliens other than […]

A well-seasoned issuer is a firm that either has at least $100 million public worldwide common equity float held by nonaffiliated, OR has issued an aggregate of at least $100 million of registered non-convertible debt securities in the past three […]

In the Air Products & Chemicals, Inc. v. Airgas, Inc. case discussed in the text, defendant’s boardof directors allegedly breached its fiduciary duties to stockholders by refusing to redeem a poison pill in place and allow a hostile takeover to […]

Which of the following is true regarding the state of mind needed in order to find a violation of Section 16(b) involving short-swing trading? a. Liability is imposed under Section 16(b) regardless of the insider’s state of mind. b. Intent […]

A contract is __________ if its terms are unduly harsh or oppressive or unreasonably favorable to one side. a. substantively unconscionable b. procedurally unconscionable c. procedurally impracticable d. substantively impracticable Answer: The Seventh Amendment grants the defendant in most criminal […]

A proposal by a sales representative that is subject to approval by the home office is not an offer. a. True b. False Answer: Which of the following is true? a. Cannot be bound on contracts made by an agent […]

The European Union takes a stricter view of vertical territorial restraints because of their tendency to impede continent-wide market integration. a. True b. False Answer: ___________ rules prescribe which law a state court should apply in a multi-state litigation. a. […]

The Fair Labor Standards Act requires that, with some exceptions, every employee be paid __________ for hours worked in excess of __________ hours in a workweek. a. one and one-half the regular rate of pay; 40 b. two times the […]

Once the Patent and Trademark Office issues a patent, a court may not find it invalid. a. True b. False Answer: Congress can override a President’s veto by a __________ vote of both the House of Representatives and the Senate. […]

Which of the following are among the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act in relation to shareholder control of pay for top executives? a. The act provides that shareholders of all privately held as well […]

What are the four basic types of intellectual property? a. Patents, copyrights, trademarks, and trade secrets b. Patents, copyrights, certifications, and trademarks c. Copyrights, certifications, trademarks, and original works d. Inventions, certifications, original works, and patents Answer: Which of the […]

Requirements that must be met under the loan agreement before the lender’s obligations arise are known as: a. conditions precedent. b. conditions concurrent. c. conditions subsequent. d. loan qualifiers. Answer: CASE 1, Wal-Mart Stores, Inc. v. Dukes (2011), involved a […]

1. Private law provides the legal rules within which firms compete. a. True b. False 2. Managers can make their own “public” law. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy NATIONAL STANDARDS: United States – AACSB: Analytic […]

1. To recover for a defective product, an injured person must be in a contractual relationship (privity) with the seller. a. True b. False 2. Most states in the United States have adopted strict product liability whereby an injured person […]

1. After a patent expires, the invention is dedicated to the public. a. True b. False 2. A copyright is a government-granted right to exclude others from making, using, or selling an invention. a. True b. False ANSWER: False POINTS: […]

1. Around half the states originally followed the employment-at-will rule. a. True b. False 2. A private-sector employee can avoid at-will status by negotiating a contract that provides for a specific term of employment and defines how the contract can […]

1. Many states have passed their own fair employment acts. a. True b. False 2. The federal statutes on race, gender and employment discrimination apply both to employees and independent contractors. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: […]

c. That obtaining the information constituted a Fourth Amendment search, but that the defendant’s constitutional right to privacy were not violated. d. That obtaining the information did not constitute a Fourth Amendment search, but that the defendant’s due process rights […]

1. Under strict liability, a defendant can be guilty of a crime regardless of his or her state of mind. a. True b. False 2. The mens rea for recklessness involves the same elements and standards as those required for […]

1. Failure to comply with environmental laws can result in civil fines but not criminal penalties. a. True b. False 2. The Clean Water Act is inapplicable to ponds that are not adjacent to open water. a. True b. False […]

1. Courts apply the per se rule when reviewing most tying arrangements and will, therefore, consider business justifications proffered by the tying firm. a. True b. False 2. Without further inquiry, boycotts are per se illegal under the Sherman Act. […]

1. In general, consumer protection law at the state level is more stringent than federal law. a. True b. False 2. Executive branch regulatory agencies are located in cabinet departments. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy […]

1. Real estate law has its roots in both English common law and Spanish civil law. a. True b. False 2. In the simplest type of ownership, property is owned by a partnership. a. True b. False ANSWER: False POINTS: […]

1. Corporations must incorporate in the state where their headquarters are located. a. True b. False 2. A creditor of a sole proprietorship may seek recovery only from business assets of the sole proprietorship, not from personal assets of the […]

42. In __________ voting, a shareholder can cast one vote for each share the shareholder owns for each nominee whereas in __________ voting, a shareholder may cast all of his or her votes for one nominee or allocate them among […]

1. Compliance with the law is just the baseline for effective and responsible managerial action. a. True b. False 2. Customers can vote with their feet by boycotting unethical practices, such as clothing made in sweatshops. a. True b. False […]

1. The Securities and Exchange Commission recognizes the affirmative responsibility of officers and directors under federal securities laws to ensure the accuracy and completeness of public company filings with the SEC. a. True b. False 2. To comply with their […]

39. Which of the following is true regarding any duties of controlling shareholders in relation to control of a corporation? a. Controlling shareholders owe no duties other than to maximize their own wealth. b. Controlling shareholders generally have a duty […]

a. 3% b. 5% c. 25% d. 51% 42. In CASE 21.1 Lawson v. FMR, LLC (2014), the question before the U.S. Supreme Court was whether the __________ Act whistleblower protections extended to __________ of __________ contractors of __________ corporations. […]

1. The Securities Act of 1933 is also referred to as the “blue sky” law. a. True b. False 2. Because of the complexity of federal securities laws, a recognized defense to a charge of violation of federal securities laws […]

1. A securities fraud claim can be used as a predicate act in a civil case under the Racketeer Influenced and Corrupt Organizations Act regardless of whether the defendant has been criminally convicted in connection with the fraud. a. True […]

40. When can a securities fraud claim be used as a predicate act in a civil case under the Racketeer Influenced and Corrupt Organizations Act (RICO)? a. When the defendant has been arrested in connection with the fraud. b. When […]

1. The UCC requires that a precise form be followed in order to create a security interest. a. True b. False 2. Commercial paper is a term that describes short-term corporate indebtedness. a. True b. False ANSWER: True POINTS: 1 […]

42. The __________ interest rate is based on the cost of borrowing offshore U.S. dollars in the global interbank market. a. International Rate Exchange b. Frankfurt International Trade Rate c. London Interbank Offered Rate d. New York Exchange Rate ANSWER: […]

1. “National Treatment” prohibits WTO members from discriminating against imported products in favor of “like products” produced domestically. a. True b. False 2. The principle of equity is unique to civil law legal systems. a. True b. False ANSWER: False […]

1. Federal judges are appointed for ten year renewable terms. a. True b. False 2. Court opinions are published in collections of court opinions called reporters. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy NATIONAL STANDARDS: United States […]

1. The Fifth Amendment contains the “due process” restriction on actions by the federal government. a. True b. False 2. The doctrine of federalism serves to allocate power between the federal government and government by the states. a. True b. […]

41. Which of the following was the result at the U.S. Supreme Court level in Citizens United v. Federal Election Commission regarding the constitutionality of the federal law providing that televised electioneering communications funded by anyone other than a candidate […]

1. In agreeing to act on behalf of the principal, the agent becomes a fiduciary. a. True b. False 2. In all cases, an agency agreement must be written in order to be enforceable. a. True b. False ANSWER: False […]

1. Administrative agencies are usually part of the legislative branch. a. True b. False 2. Failure to comply with regulations set in place by agencies may result in the imposition of fines as well as the revocation of licenses and […]

1. According to the text, most advertisements are treated as offers, rather than as invitations to negotiate. a. True b. False 2. An objective standard is used in determining whether an offer has been made. a. True b. False ANSWER: […]

1. The Uniform Computer Information Transactions Act is a federal law. a. True b. False 2. Many states have applied Article 2 of the UCC to software licenses either directly or by analogy. a. True b. False ANSWER: True POINTS: […]

1. A tort is a type of civil or criminal wrong. a. True b. False 2. Intent cannot be implied. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate NATIONAL STANDARDS: United States – BUSBROG: – Analytic ACCREDITING STANDARDS: […]